Apple cuts revenue forecast as demand plunges in China

Bloomberg

Apple Inc plunged to its lowest price in a year-and-a-half after the company cut its revenue outlook for the first time in almost two decades, citing weaker demand in China.
Chief Executive Officer Tim Cook said sales will be about $84 billion in the quarter ended on December 29, down from earlier estimates of $89 billion to $93 billion. 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 shares fell 10 percent to $142.19, the biggest drop in almost six years, in New York. The revenue revision 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 announcement, made in a letter from Cook to investors, comes after weeks of signals from inside Apple and its supply chain indicating the Cupertino, California-based company is struggling to sell the latest iPhones released in September. The flagship product earns Apple about two-thirds of its revenue, and allows company
to generate more money from attached products like Apple Watches, AirPods, and services like Apple Music.
“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. Greater China, a region that includes mainland, Hong Kong and Taiwan, accounted for most of the revenue shortfall, but iPhone upgrades also wer-en’t as strong as company anticipated in some developed markets, Cook said.
Suppliers in Europe and Asia slumped on the news. Several key Apple suppliers overseas had cut their revenue estimates during past few months, suggesting some- thing was amiss. In November, the firm said it would stop reporting unit sales of iPhones, iPads and Macs beginning in fiscal 2019.