Apple Plunges 8%




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ORIGINAL POST

Posted by Ed 17 days ago
At the customary time of 4:30pm ET for Apple, the world's largest company saw its stock unexpectedly halted, when just a few months after Apple shocked investors when it announced it would no longer break out iPhone sales, Tim Cook delivered even more bad news for AAPL investors warning that it was slashing Q1 revenue guidance, saying "our revenue will be lower than our original guidance for the quarter" blaming it all on iPhone sales in China, i.e., "lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline", and now expects to make only $84 billion in the first fiscal quarter, an 8% drop from the consensus estimate of $91 billion.

The stated reason for the revenue guidance cut - weakness across emerging markets, with China in particular, to wit:

https://www.zerohedge.com/news/2019-01-02/apple-cuts-q1-revenue-guidance-blames-china-stock-halted

COMMENTS

Ed 17 days ago
iPhone Sales Croak, China’s Economy Deteriorating Faster than Expected, Apple Warns. Shares Plunge

“We did not foresee the magnitude of the economic deceleration.” Oh dude, starting the year out on the right foot.


On Wednesday after the market closed, Apple released a letter to shareholders in which it said that revenues are going to be a lot worse in the quarter ended December 29 than its guidance two months ago, that iPhone revenues have dropped year-over-year, that China’s economic problems are deeper than expected, and that iPhone revenues are hurting elsewhere too. This confirms a series of revenue warnings from Apple suppliers.

Shares plunged 7.5% after hours to $146. If shares close at this level on Thursday, it would be the lowest close since November 7, 2017. Shares have plunged 38% in three months.

Wow, this was quick.

https://wolfstreet.com/wp-content/uploads/2019/01/US-Apple-2019-02-02.png


In its “Letter from Tim Cook,” Apple slashed its revenue guidance by 6% to 10% from its prior guidance two months ago, to about $84 billion in the quarter, down from its previous guidance of $89 billion to $93 billion.

iPhone Sales Croak, China’s Economy Deteriorating Faster than Expected, Apple Warns. Shares Plunge
by Wolf Richter • Jan 2, 2019 • 6 Comments
“We did not foresee the magnitude of the economic deceleration.” Oh dude, starting the year out on the right foot.
On Wednesday after the market closed, Apple released a letter to shareholders in which it said that revenues are going to be a lot worse in the quarter ended December 29 than its guidance two months ago, that iPhone revenues have dropped year-over-year, that China’s economic problems are deeper than expected, and that iPhone revenues are hurting elsewhere too. This confirms a series of revenue warnings from Apple suppliers.

Shares plunged 7.5% after hours to $146. If shares close at this level on Thursday, it would be the lowest close since November 7, 2017. Shares have plunged 38% in three months. Wow, this was quick:



In its “Letter from Tim Cook,” Apple slashed its revenue guidance by 6% to 10% from its prior guidance two months ago, to about $84 billion in the quarter, down from its previous guidance of $89 billion to $93 billion.



Just to get this straight, this revenue guidance of $84 billion represents a 5% revenue decline from the quarter a year ago. The price increases of its new models aren’t exactly helping a lot, it seems.

Here are some of the key points Apple made in its letter (emphasis added):

https://wolfstreet.com/2019/01/02/iphone-sales-croak-china-particularly-bad-apple-warns-shares-plunge/

Ed 17 days ago
Apple Isn’t the Only Casualty of China's Slowdown

https://www.bloomberg.com/news/articles/2019-01-03/china-s-slowdown-claims-biggest-corporate-scalp-yet-with-apple

Ed 10 days ago
Imagining Apple’s Post-iPhone Future

The tech giant needs to do more to make its products compatible with competitors’.

Apple’s reported plans to cut iPhone production by 10 percent in the first quarter of 2019 make increasingly clear that the company’s base of loyal users isn’t an inexhaustible resource from whom it can forever extract a rent through its services offerings.

Apple needs to compete more vigorously in all the other markets in which it’s present, without relying on the network effects of its large installed base.

Whether you blame economic headwinds in key markets such as China (as Apple Chief Executive Officer Tim Cook did in a recent letter to investors) or the company’s own mistakes (as my Bloomberg Opinion colleague Shira Ovide has done), or any combination of these factors, Apple appears about to slide down the table of biggest smartphone suppliers by unit sales.

It’s already the third-biggest supplier after Samsung and Huawei, having lost the second spot to the Chinese company earlier this year. And if it can’t sell as many phones as it once hoped at its super-premium prices, and if the pricing doesn’t change, other companies will pass it as they’ve already done in China.

https://www.bloomberg.com/opinion/articles/2019-01-09/time-to-start-imagining-a-post-iphone-apple

Ed 10 days ago
Commentary: How Apple’s iPhone lost its lustre


Apple's iPhone setback marks the passing of a golden age of smartphones, says the Financial Times' John Gapper.

LONDON: As Joni Mitchell sang in Big Yellow Taxi:

Don’t it always seem to go, that you don’t know what you’ve got ’til it’s gone.

Apple knows it now, from the abrupt fall in its share price last week as it admitted that customers in China and elsewhere are taking their time in buying new iPhones.

It was a wonderful streak while it lasted, as it has done (with some ups and downs) since the iPhone’s launch in 2007.

It is rare for people to replace an expensive consumer product every two years because the next model is so alluring, although the existing one still works perfectly well. That is about as virtuous a circle as any company can hope to achieve.

For a while, Apple gained all the benefits of planned obsolescence without any of the disgrace.



People rushed to trade in iPhones even though they still loved them — they lined up to proclaim their excitement at being allowed to ascend to the next level. No taint attached to Apple for making ephemeral goods.

“We want the man who buys one of our cars never to have to buy another,” Henry Ford said in 1922 of his Model T, a car that came with a repair kit for customers to keep it going.

The following year, Alfred Sloan of General Motors unveiled the 1923 Chevrolet, a car with an old chassis but a stylish design that started the Detroit tradition of the annual model upgrade.

Sloan’s approach won out over Ford’s in many consumer industries — companies realised that making durable products was a recipe for strangling their sales and opted for disposability instead.


Read more at https://www.channelnewsasia.com/news/commentary/how-apple-iphone-lost-its-lustre-revenue-stock-share-fall-11102084

Ed 7 days ago
Not worth it? Chinese resellers cut iPhone prices after Apple bombshell warning

China-based retailers have rolled out huge discounts on Apple phones, including the latest iPhone XR model. The generous offering comes after the US giant had to issue a rare gloomy revenue forecast for its sales in the country.

https://www.rt.com/business/448574-iphone-sales-chinese-retailers/


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