Apple shares close almost 10pc lower after China sales warning

Apple shares close almost 10pc lower after China sales warning

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's bombshell news - a sharply weaker revenue outlook and lower iPhone sales - has raised questions over the future of the California giant, which until recently had been seen as the undisputed innovation leader in the tech sector. The revenue revision, which came late Wednesday, led markets lower around the world and also triggered a slump for Asian suppliers and a wave of lower price targets from Wall Street. The company also sees the traffic to retail stores and partner sellers in China declining in the quarter. In an unscheduled update it said there had been a "significantly greater impact than we had projected" from slower growth in emerging markets.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", Cook wrote, noting that "most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China".

China's economy grew at its weakest pace since the financial crisis last quarter as its trade war with the USA added uncertainty to an already rocky environment.

STMicroelectronics shares were down more than 9 percent. The company shares fell 7.7 per cent in after-hours trading, so Apple is now worth less than $700 billion.

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The company now expects revenue of around $84 billion (£67bn) for the October to December period, well below previous predictions of up to $91bn (£72bn).

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

Following a massive scandal over its practice of deliberately slowing down older iPhones, Apple reduced the price for its battery replacements, charging $29 instead of $79 in 2018.

After Apple's first revenue warning in almost 12 years, investors also dumped chipmakers and tech stocks and flocked to perceived safe havens like U.S. Treasuries and the Japanese yen. "There are a heck of a lot of USA companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China". -China trade tensions drove the S&P 500 Index to the brink of a bear market. Mid-level officials from the Trump administration are scheduled to travel to Beijing for talks early next week.

"Our business in China was very strong last quarter", Apple CEO Tim Cook told investors on November 1, citing 16% growth. In the third quarter, Huawei's premium line, Honor, grew by 14% year-over-year while sales volume of VIVO was up by 2%, data from Counterpoint Research shows. The offer comes after Apple iPhone sales in China lost momentum in November, with shipments tanking 22.8% month-over-month and iPhone's market share dropping to 11.7%.

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