"The firm alleges that Cook's letter blaming business in China for the revenue shortfall is contrary to what he told investors during the company's fourth quarter conference call on November 1, where Cook is quoted as saying, "[Our] business in China was very strong last quarter. In late December, the promotional program for the new models went live in China, adding one major perk: users in China cannot only trade in their old iPhones, but also Android phones made by Apple's major competitors in China, including Huawei, OPPO and Xiaomi. In his letter, Cook said that more than 100% of the company's worldwide revenue decline was in China for sales of iPhones, Macs and iPads. Cook blamed the macroeconomy and U.S.
Shares of US-based suppliers and chipmakers including Cirrus Logic Inc, Skyworks Solutions Inc, Analog Devices, Broadcom Inc, NXP Semiconductors NV and Micron Technology Inc were all down in morning trading.
Cook told investors that the main drag on the firm's performance in China had been a sharper-than-expected slowdown in the country's economy, exacerbated by the impact of trade tensions between Washington and Beijing. On Thursday it was also announced that Apple is likely to remove some iPhones from stores in Germany, as Qualcomm moves to enforce an earlier court order banning the sale of some iPhone models in the country.
Although Cook pointed fingers at China almost a dozen times in his letter, many analysts believe Apple's underlying issues are far more complex than a slowdown in one market.
Apple said China sales came in lower than expected in the quarter ending December 29 when it revised its revenue estimate downward. "We believe the economic environment in China has been further impacted by rising trade tensions with the United States", he wrote.
US government bond prices surged, sending yields to their lowest level in nearly a year, and gold and high-dividend stocks like utilities also rose as investors looked for safer places to put their money. The world's second largest economy is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.
Market jitters even extended briefly to the Brexit-battered pound, which tumbled to a 21-month low close to $1.24 overnight against the USA dollar in a "flash crash" triggered by an exodus from currencies considered riskier - before very quickly recovering the losses to return to around $1.26.
The Apple news jolted markets and reinforced fears that the global economy is slowing. "It will be interesting to see how Apple shares react if there's a China trade agreement".
By early 2018, General Motors was selling a third more cars in China than in the U.S. Starbucks unveiled plans to open a new coffee shop in China every 15 hours on average. Better iCloud storage, an Apple News content subscription (which I will happily pay for if it means no longer needing to visit ad tracking-riddled websites), an Apple video subscription, and more. Stocks in Asia closed with small losses.
Oil prices edged higher.
Apple shares were down 9.8 percent at $142.40. The British pound fell to $1.2630 from $1.2690.
The yield on the 10-year Treasury fell to 2.64 percent.