Apple sees significant slump in iPhone sales

Apple warns that iPhone sales could take big hit

Apple (AAPL) unexpectedly slashed its revenue forecast for the fiscal first quarter of 2019 on Wednesday, citing weakness in China and lower-than-anticipated iPhone revenue.

Shares in the California-based tech giant fell 8% in after-hours trading after Mr Cook said it now expected revenues of around $84bn (£67bn) in the three months to 29 December, down from previous guidance of $89bn-$93bn. It's also far short of the forecast Apple gave investors only two months ago, which saw revenue in the quarter coming in between $89 billion and $93 billion.

Apple has been an absolute juggernaut in terms of sales, growth, revenue, and profit for shareholders.

On Apple's earnings call in November, Cook cited slowing growth in emerging markets such as Brazil, India and Russian Federation for the lower-than-anticipated sales estimates for the company's fiscal first quarter.

Cook also understands that many customers are just skipping the iPhone due to its astronomical price tag which starts at $1,000USD.

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.

Despite the struggles, Cook maintains that Apple has a "bright future" in China because of the country's innovative developer community and Apple's strong following there.

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The Apple CEO noted China's economy had begun to slow in the second half of 2018 and, in a thinly veiled jab, said Trump's trade war with China also bore some responsibility for the poor performance.

Some of the reasons for the weak iPhone upgrades in the first quarter were price increases based on the strength of the U.S. dollar, fewer carrier subsidies and cheaper battery replacements.

While President Donald Trump's trade war with China isn't helping Apple and other USA technology companies, Ives believes Apple miscalculated by continuing to roll out high-priced phones in China, creating an opening for rivals with less costly alternatives that still worked well.

"We believe the economic environment in China has been further impacted by rising trade tensions with the United States", Cook said.

Apple has become the target of nationalist sentiment over the arrest of Huawei's chief financial officer in Canada at the behest of the United States for alleged Iran sanctions violations. Several companies in the country are reportedly offering subsidies to employees for buying Huawei phones and some have even warned employees to avoid Apple iPhones.

The Chinese government has condemned the arrest and demanded her release.

China is not only the problem for Apple.

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