Apple shares sink as iPhone sales figures slashed

Oscar PerryJan 04, 2019

Nowadays though, the iPhone is more expensive than ever and less people seem interested in upgrading, leading to Apple issuing its first "profit warning" since 2002.

Apple will have to figure out ways to courageous macroeconomic woes like this, and that might mean learning to make more money from non-iPhone products in its catalog. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years.

In the U.S., the benchmark S&P 500 stock index dropped as much as 1pc after data showed Chinese factory activity contracting for the first time in more than two years, though the index clawed back the losses later in the session.

White House economic adviser Kevin Hassett said Thursday that "it's not going to be just Apple" that faces revenue shortfalls as a result of the trade tensions initiated by President Donald Trump between the United States and China. In late December, the promotional program for the new models went live in China, adding one major perk: users in China cannot only trade in their old iPhones, but also Android phones made by Apple's major competitors in China, including Huawei, OPPO and Xiaomi.

Most of the unforeseen drop in sales revenue is a result of economic deceleration in "Greater China", he said in an earnings call. Two reasons: "- iPhone X was really, really good, and battery life is still great - The 2018 models were functionally identical to the iPhone X", Newton said.

Apple is taking steps to counter the impact of these negative market conditions, Cook wrote. Several companies in China are fining employees who buy an iPhone, and are subsidizing the purchase of phones made by Huawei or other Chinese manufacturers.

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Apple's stock price dropped nearly 10 percent Thursday, closing the day at $142.19, the company's biggest single-day loss in six years. While usually Apple would be celebrating another successful holiday season, things didn't quite go to plan this time around.

"We expected economic weakness in some emerging markets".

Meanwhile, Apple's installed base of active devices hit a new all-time high, growing by more than 100 million units in 12 months.

Cook added that Apple was performing well in a few emerging markets and could see record revenues in Malaysia, Mexico, Poland and Vietnam.

"The question for investors will be the extent to which Apple's aggressive pricing has exacerbated this situation and what this means for the company's longer-term pricing power within its iPhone franchise", said James Cordwell, an analyst at Atlantic Equities.

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