Apple warns of revenue hit from US-China trade war

Jeannie Matthews
January 6, 2019

In typical Trump style, the United States president somehow said that Apple's growth has been incredible since he came into power. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.

A warning from Apple about a sales slump in China sent shockwaves through stock markets yesterday and prompted one market analyst to say that the surprise announcement marked Apple's "darkest day in the iPhone era". The iPhone maker reported $2.91 earnings per share for the quarter, beating analysts' consensus estimates of $2.78 by $0.13. Predictably, shares of Apple absolutely tanked as a result and are now trading at a level we haven't seen since mid-2017.

But the majority of Apple analysts are holding onto their bullish views despite problems seemingly coming from all corners.

The development was the latest sign of increasing economic concerns among Chinese buyers. He said, "Don't forget this, Apple makes their product in China, I told Tim Cook who is a friend of mine who I like a lot, make your product in the United States, build those attractive plants that go on for miles it seems".

In other trading, US crude oil added $1.04 to $48.13 per barrel in electronic trading on the New York Mercantile Exchange.

While Cook said the main factor for the weakening iPhone demand is the trade war between the United States and China, many believe the high prices of the 2018 iPhones are actually what convinced many potential buyers to hold on to their purchases. On average, analysts predict that Apple will post 13.18 EPS for the current year.

Apple shares drop after news of waning iPhone sales
The Apple brand is extremely strong - Interbrand, for example, names it the most valuable brand on the planet. The lack of a breakthrough product surely contributed to Apple's not-so-hot outlook.

Christian Eriksen: Tottenham boss Mauricio Pochettino says deal would be 'fantastic'
Fellow midfielder Mousa Dembele has always been linked with an exit and appears far from certain to see out the season with Spurs. The 26-year-old Denmark global has become a key player for Spurs since arriving in North London from Ajax in 2013.

Two arrested on suspicion of smuggling migrants across English Channel into UK
He told reporters 539 people had crossed the Straits in 2018, with 80% making the journey in the last three months of the year. A 33-year-old Iranian national and a 24-year-old British man, arrested in Manchester on Wednesday, remain in police custody.

Currently, a Huawei Mate 20 Pro retails from upwards of RMB5,399, an Oppo R17 Pro goes for upwards of RMB4,299, while the Apple iPhoneXS Max with 6.5 inch display starts at around RMB9,599, just barely under the price of those Huawei and Oppo models combined. He didn't mention that Apple has fairly steadily lost smartphone market share in that country to local rivals such as Huawei and Oppo, which generally charge far less for their phones than Apple does. But that was the country's lowest rate of growth since the 2008 world economic crisis.

The company also anticipated some economic challenges in emerging markets, although "this turned out to have a significantly greater impact than we had projected", Cook wrote.

A woman browses her iPhone as she walks by a mural depicting an iPhone and Chinese people buy smartphone to communicate with family members, at a subway station in Beijing, Thursday, Jan. 3, 2019. He described the change in how Chinese buyers see the future as "definitely worrying". Growth in China and the eurozone is slowing. During the same period in the prior year, the company posted $2.07 EPS.

Investors also were encouraged by news that the US and China will hold trade talks in Beijing on January 7 and 8.

China has become a popular boogeyman-for the markets and now, for Apple.

Traders braced for another dose of the turbulence that ruled equities all December after reduced guidance at Apple Inc. sent exchange-traded funds tracking major indexes falling.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER