The trade war and China’s slowing economy threatens to take a huge bite out of Apple’s earnings. In a rare warning to investors, the tech giant cut its revenue outlook for the latest quarter on Wednesday.
Apple also cited steeper-than-expected “economic deceleration” in the world’s second-largest economy and the downturn in emerging markets.
But the main reason for weaker sales of major products, such as the iPhone, was blamed on trade frictions between Washington and Beijing.
News of Apple’s concerns saw shares slide about 7.6% in after-hours trading.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Tim Cook, the chief executive at Apple, said in a letter to investors.
“We believe the economic environment in China has been further impacted by rising trade tensions with the United States.”
The blue-chip company slashed its revenue guidance for the first fiscal quarter of 2019, which ended on December 29, to US$84 billion.
This was sharply lower than analyst forecasts of around $91 billion.
“We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” Cook added.
Apple has become the target of nationalist sentiment over the arrest of Huawei’s chief financial officer in Canada at the behest of the US for alleged Iran sanctions violations.
Meng Wanzhou, who is also the daughter of the company’s founder, Ren Zhengfei, was detained in Vancouver on December 1 on a US extradition request linked to sanctions-breaking business dealings with Iran.
The Chinese government has condemned the arrest and demanded her release. The fallout has also left some Chinese shoppers boycotting major US companies such as Apple.
– with reporting from AFP
With no money made from US, no money by locals to buy Iphones. That’s China’s middle class consumer.
With no money made from US, no money by locals to buy Iphones. That’s China’s middle class consumer.
Apple should have more fears for the trumpeter’s weilding of his favorite semiconductor weapon like Qualcomm than the loss in the China market.
Apple should have more fears for the trumpeter’s weilding of his favorite semiconductor weapon like Qualcomm than the loss in the China market.
Where’s the vaunted consumer being touted by CCP ? It’s all propaganda, as always. Wumao nation will go to extreme lengths until exposed as lies.
Where’s the vaunted consumer being touted by CCP ? It’s all propaganda, as always. Wumao nation will go to extreme lengths until exposed as lies.
IRRATIONAL OUTBURST IS SIGN OF FEAR & INFERIORITY COMPLEX.
IRRATIONAL OUTBURST IS SIGN OF FEAR & INFERIORITY COMPLEX.
Agree, China likes to massively overestimate it’s economy and even they are admitting to a major issue which means in reality it’s a depression level issue.
Industry in China is in retraction based on PMI figures of the govenment, Consumer spending is close to non existent, govenment spending is way out of control.
This does not bode well for China in 2019 and I don’t think many people will care that Apple has lower than expected revenue. They make so much money on these products already that it will barely make any real impact. Bet they are regretting moving factories to the Chinese 50 cent an hour sweatshops now tariffs are hitting there bottom line, Thailand or Taiwan will be next places they move the factories too and considering so many other Western Corps are doing the same thing the outlook for China’s economy is going to get considerably worst before it gets better.
China was built with western money, whether they like to accept it or not and with Xi’s policies and behavior they have harmed the good faith that was built during the last 30 years. In the west there is a saying… Don’t bite the hand that feeds you!
Agree, China likes to massively overestimate it’s economy and even they are admitting to a major issue which means in reality it’s a depression level issue.
Industry in China is in retraction based on PMI figures of the govenment, Consumer spending is close to non existent, govenment spending is way out of control.
This does not bode well for China in 2019 and I don’t think many people will care that Apple has lower than expected revenue. They make so much money on these products already that it will barely make any real impact. Bet they are regretting moving factories to the Chinese 50 cent an hour sweatshops now tariffs are hitting there bottom line, Thailand or Taiwan will be next places they move the factories too and considering so many other Western Corps are doing the same thing the outlook for China’s economy is going to get considerably worst before it gets better.
China was built with western money, whether they like to accept it or not and with Xi’s policies and behavior they have harmed the good faith that was built during the last 30 years. In the west there is a saying… Don’t bite the hand that feeds you!