Published: Sat, January 05, 2019
Money | By Ralph Mccoy

Apple to Miss Sales Expectations, Dow takes a Hit

Apple to Miss Sales Expectations, Dow takes a Hit

That was down from an earlier estimate of $89 to $93 billion. Nevertheless, the relatively poor earnings performance has depressed Apple's share price by about 8% recently, and may have had a knock-on effect on other tech stocks. It made up about 60 percent of the company's revenue in the last quarter reported.

Apple's stock price (AAPL) climbed 94 percent from its close the day before Trump's inauguration through through October 3, 2018 but has since fallen 36 percent. 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.

The Chinese apparently have been avoiding Apple stores in droves.

Perhaps in part because there are no easy fixes, Apple failed to acknowledge the possibility that current iPhone prices are simply too high (stunningly, we note that iPhones prices are almost 5x higher than the average non-Apple smartphone sold globally).

Apple's problems in China are piling pressure on the company to find a way to grow in India, the world's hottest market for smartphones.

The significance of Apple's results is partly that it sheds a tiny bit of light on what's really going on in China - and how that might affect other firms and economies - in a country where top-line economic data given by the government are murky at best and fudged at worst. But that was the country's lowest rate of growth since the 2008 world economic crisis.

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A woman browses her iPhone as she walks by a mural depicting an iPhone and Chinese people buy smartphone to communicate with family members, at a subway station in Beijing, Thursday, Jan. 3, 2019.

"It's definitely worrying", said China specialist David Dollar, senior fellow at the Brookings Institution.

"I have no plans to buy an apartment, a vehicle or any other major items", Yuan said. "People are anxious about losing jobs", she said. China accounts for one-third of the industry's global handset shipments. A key manufacturing survey at the end of the year showed Chinese factory activity actually contracting. On its website in China, Apple now advertises the iPhone XR for 4,399 yuan with the trade-in of an iPhone 7 Plus. "There's a hole in Apple's product portfolio - they do not have a low-cost smartphone to fully exploit emerging markets".

Mr Cook also acknowledged that demand for the latest iPhone is down.

US shares fell after Apple CEO Tim Cook told shareholders after markets closed Wednesday that Chinese iPhone sales were slipping. "You have to be a little more cautious, and you have to be a little more defensive until we get further clarity and further visibility in the situation and it just seems like that's not going to come anytime soon".

On Friday, South Korea's Kospi, which has a high number of technology stocks, added 0.9 per cent to 2,010.96. Bryan Lynn adapted the reports for VOA Learning English.

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