Apple warns of revenue hit from US-China trade war

Andrew Cummings
January 6, 2019

The single specific initiative Cook mentioned was making it simpler to trade in an older model iPhone at Apple's stores, finance the purchase over time and get help transferring apps and other data. During the same period a year ago, the company earned $2.07 earnings per share.

The President's assertion - that Apple is investing $350 billion into the United States and will soon build its iPhones in the country - is false.

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. Indeed, in fiscal 2018, the company derived $51.9 billion from the region - a whopping 20% of its total revenue.

The move confirmed investors' biggest fear - a slowing global economy further hindered by the U.S.

The Chinese government has condemned the arrest and demanded her release.

Apple said at the time that it wanted to reduce investor focus on its iPhone division and instead highlight other promising areas of its business, including its services division that sells subscriptions for music streaming, collects app-related commissions and repairs malfunctioning devices.

The overall smartphone market didn't fare well in 2018. Domestic giants Huawei, Oppo, Vivo, Xiaomi (which run on the Android operating system) account for 77% of the China market, according to IDC. "It's going to go up once we settle trade issues and a couple of other things happen".

Several key Apple suppliers overseas had cut their revenue estimates during the past few months, suggesting something was amiss.

Cook blamed a number of issues, including lackluster iPhone sales, but also pointed to Trump's trade war with China. "And consumer confidence is definitely down, which is probably part of what's behind the Apple numbers". After all, Apple kicked off the program in December 2017. That's a risk that investors need to watch not only in 2019, but over the long term as well. December 2018, Apple computing, only with a turnover of 84 billion U.S. dollars, it said in a letter to the Apple chief Tim Cook to the Investors.

The reason for that shortfall?

What happened: In a rare move, Apple has cut its quarterly sales forecast, blaming its poor performance on trade tensions between China and the U.S., as well as economic deceleration in Greater China.

Apple undoubtedly has some strong competitive advantages in the marketplace. Our products enjoy a strong following among customers, with a very high level of engagement and satisfaction.

The weakness also made Trump's claim false that Apple has gained "hundreds of percent" since the election.

Apple's tendency to charge more for iPhones outside the United States has "led to slowing demand" in markets such as India, said Neil Shah, an analyst at Counterpoint Research. Stokes Capital Advisors LLC's holdings in Apple were worth $4,271,000 at the end of the most recent reporting period.

"The question now is will Apple change its strategy or stick to its hubris", Ives said.

Apple's first instance of revised earnings guidance since 2002 has the potential to rattle the financial markets as it puts the spotlight on China's woes and the dependence of the largest US companies on strong growth in the world's second-largest economy.

Last night, before the company briefly stopped trading to make its announcement, the stock stood at $157.92 a share.

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