Apple Announces Revenue Is Unraveling

The tech giant said revenue for its fiscal first quarter, which ended December 29, will be about $84 billion, falling short of an average analyst estimate of $91.5 billion.

Peak Apple Apple shares were temporarily pulled from trading on Wednesday as the Cupertino idiot-tax operation warned of lousy sales numbers on the horizon.

While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, sales disappointed in some developed markets as well. "In fact, categories outside of iPhone (Services, Mac, iPad, Wearables/Home/Accessories) combined to grow nearly 19 percent year-over-year", also stated Cook. He also said that upgrades to new iPhone models in other countries were "not as strong as we thought they would be". It also pulled in $88.3 billion during the first fiscal quarter of 2018 - so, at $84 billion, Apple will see a year-over-year dip.

Apple CEO Tim Cook delivers the keynote address at the Apple 2012 World Wide Developers Conference (WWDC) at Moscone West on June 11, 2012 in San Francisco, California. Apple said it has put more than 100 million new Apple devices into service over the past year. The Apple CEO attributed the reduced demand to fewer network subsidies, the stronger USA dollar, and cheap iPhone battery replacements.

"Obviously China is a bit of a closed shop when it comes to information, so when you get a credible company like Apple saying that things are going a bit slower than expected, then that does make people a bit nervous about what's happening", he said. China's economy has been pinched by the ongoing Sino-US trade war which is spilling over to other Asian economies.

In his letter, Cook said Apple has US$130 billion in net cash and that it intends to continue its efforts to reduce that cash balance to net zero, which the company has so far accomplished through dividend increases and share buy backs.

Apple previously told investors to expect revenue between $US89 billion and $US93 billion. For Apple, this quarter actually ended on December 29, 2018. Apple shares fell as much as 9.6 per cent as the market opened in NY on Thursday.

Apple has reduced its Q1 revenue estimates, primarily due to lower iPhone demand. As of July, the US was running a $222.6 billion trade deficit with China.

Apple suppliers' shares tumbled on the news.

CEO Tim Cook blamed the slump on a slowing economy in China, where Apple has also faced competition from Huawei and Xiaomi.

  • Wendy Palmer