Apple admits it is going to miss iPhone sales

Apple admits it is going to miss iPhone sales

"I think there are a heck of a lot of USA companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China".

Goldman Sachs says Apple admitting that iPhone sales are declining is just the beginning of a longer drop, adding that further revisions to the earnings guidance are likely throughout the year.

Apple's stock price hovered around the $143-$144 mark in the first few minutes of trading, down about 9% from Wednesday's closing price of $157.92.

Apple's decline dragged down the Dow Jones Industrial Average index on Thursday.

The yield on the 10-year Treasury fell to 2.64 percent. Counterpoint reported iPhone sales dropped by 17% year-over-year during the third quarter due to the weak initial performance of the new models.

Cook said the slowing in China's economy was made worse by "rising trade tensions with the United States".

On the other hand, Cook also stressed that Apple showed considerable strengths in other areas (particularly in its cash assets: the company is now sitting on about $130 billion).

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The tech company's troubles send a message for companies doing business in China, or suppliers with customers that do business in China, that the effects of trade tensions and a slowing economy are rippling to consumers, curbing demand and spending. "There are a heck of a lot of USA companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China".

Apple chief executive Tim Cook said in a letter to shareholders, published after the close of trading on Wednesday, that it "did not foresee the magnitude of the economic deceleration" in China.

Trump also seemed to suggest that the reason for Apple's recent misstep was the location of their manufacturing plants. In China, there were less than 100 million smartphone shipments in the first three months, and the second quarter saw a 5.9% year-over-year decline.

At least 15 Wall Street analysts lowered their price targets on Apple's stock before markets opened today, with one slashing its price target by $75 to $200 per share.

The tech giant has gone as far as assigning members of its marketing team to work full-time on boosting sales, and has upped the amount it is willing to pay for devices traded in toward the purchase of a new iPhone, according to a report earlier this month. For one thing, Apple is rolling out new 5G capabilities into its products much more slowly than its rivals are.

Apple Inc. shares fell almost 10 percent by market close on January 3, following a press release issued by CEO Tim Cook after market close the previous day.

With more than 40 stores and hundreds of millions of iPhones sold in the country, Apple is arguably the most successful and highest-profile U.S. company in China.

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