Published: Sat, January 05, 2019
Markets | By Jeffery Armstrong

What's Going On With Apple

What's Going On With Apple

Chief Executive Officer Tim Cook said on Wednesday the company did not foresee the magnitude of the economic deceleration in China, adding that trade tensions between Washington and Beijing further pressured the company. On the positive side of things, Cook is reporting increased sales in a few avenues of note, namely in services, accessories, and in the sale of wearable tech like smart-watches and iPatches, to name but a few of the new gidgets littering the market with the Apple logo.

At least 15 Wall Street analysts lowered their price targets on Apple's stock before markets opened today, with one slashing its price target by $75 to $200 per share. Apple posted sales of $88.3 billion in the fiscal first quarter a year earlier, so the new forecast would mean Apple is reporting a holiday quarter slowdown for the first time since Cook became CEO in 2011.

Apple CEO Tim Cook said in a letter to shareholders released after markets closed on Wednesday attributed that most of the revenue drop will stem from lower iPhone sales, China's slowing economy and trade tensions between China and the U.S. Analysts see it as a result of slow sales volume of the new iPhone Xs and XRs since their launch in September. Furthermore, Cook conceded that the revenue from iPhone sales was lower than anticipated.

More news: Moses Set To Get Chelsea Recall For Crystal Palace Clash

"Up to now, Apple has defied gravity by growing faster than any other company in the market, but mathematically it was impossible to beat the market forever". Some analysts point the finger at Apple itself, and its pursuit of constantly increasing iPhone prices. Universal Display Corp. declined 3.5 per cent and Lumentum Holdings Inc. tumbled 8.7 per cent. Shares of USA retailers that sell Apple products were also weak on the news.

"I think there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China".

"This is not a catastrophe nor is it a sign that Apple is losing its grip on the smartphone market but merely a misjudgment by Apple with regard to how much money people will pay for an iPhone".

More news: Coachella 2019 Announces Full Lineup

Cirrus Logic, which makes audio chips for Apple products, dropped 7 percent.

The sell-off also affected luxury brands including UK-based Burberry - down 6% - as Apple said China's economic woes and trade war with the United States was weighing on consumers in the world's second biggest economy. There are likely many others, too, that will be forced to announce lower-than-expected earnings, according to the chairman of the White House Council of Economic Advisers.

Apple's decision to cut its sales outlook, "isn't a huge shock at this point", said Shannon Cross of Cross Research.

More news: Kane adds Cardiff to list of EPL victims

Like this: