Apple warns investors that iPhone sales are weak

Apple warns investors that iPhone sales are weak

Apple's stocks fell by 10 percent Thursday in the wake of the company cutting its quarterly revenue outlook for the first time in two decades. While this is still quite a large sum, the company expected to bring in revenue between $89 billion and $93 billion.

Apple shares dropped nearly nine percent on Thursday, falling to their lowest amount since April 2017, the Wall Street Journal reported.

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

Still, the market seemed to be caught off guard. "We have underestimated the strength of the economic downturn, especially in China", wrote Tim Cook. The shares had already fallen 32 percent from their peak in early October when investors still had high hopes for the new iPhone models.

"This is not only great for the environment, it is great for the customer, as their existing phone acts as a subsidy for their new phone", Cook said.

The Institute for Supply Management said its index of US manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. The company also saw "fewer iPhone upgrades than we had anticipated", he said.

The statement from one of the world's largest companies will further rattle investors already anxious about the slowing Chinese economy. He added that overall, "consumption growth" is slowing down across China. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to its retail stores and its channel partners in China declining as the quarter progressed.

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With Apple's slumping stock taking a lot of the market down with it, the White House seemingly felt compelled to chime in on the matter.

"It's not going to be just Apple", CEA chairman Kevin Hassett said in an interview on CNN.

"When we discussed our Q1 guidance with you about 60 days ago, we knew the first quarter would be impacted by both macroeconomic and Apple-specific factors".

"They're gonna be fine", Trump said at a Friday news conference at the White House. Mid-level officials from the Trump administration are scheduled to travel to Beijing for talks early next week.

"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfalls to our guidance and much more than our entire year-over-year revenue decline".

Among big industrial companies that could suffer from a drop in demand from China, Caterpillar declined 3.9 percent, Deere 2.7 percent and Boeing 4 percent.

During the past year, the USA and China slapped new tariffs on hundreds of billions of dollars' worth of imports in a trade war that threatens to snarl multinational companies' supply lines and reduce demand for their products. Apple is appealing the decision.

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