Published: Fri, January 04, 2019
Markets | By Otis Pena

Apple cuts revenue estimates, blames weak iPhone sales, cheap battery replacements

Apple cuts revenue estimates, blames weak iPhone sales, cheap battery replacements

But Cook also mentioned fewer carrier subsidiaries on new iPhones, as well as the dramatically lowered battery replacement price for older models (due to Apple's iPhone slowdown drama from late 2017), as contributing factors.

"If you look at our results, our shortfall is over 100% from iPhone, and it is primarily in greater China", Cook told CNBC.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China", Cook said in a letter to investors.

Also adding to investor concerns was a report that showed manufacturing activity in USA factories was slowing to its lowest level in two years.

The company had not decreased its quarterly revenue forecast in over 15 years before Wednesday.

The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September a year ago to seize the number two spot behind industry leader Samsung, according to the research firm International Data Corp.

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After Asian markets tumbled overnight and European exchanges stumbled, USA futures were trading lower on Thursday morning, dragged down by Apple's stunning announcement Wednesday. Apple said the smartphone market in China has been contracting, and that's true.

Trying to see the glass half full, Cook noted that other divisions of Apple have risen by 19 percent year over year.

Others advised Cook to stop pointing the finger at China, and instead fix the flaws in Apple services and work on new products. The truth remains that the iPhone has always been Apple's core business and if Apple can't sell enough of them, the whole company struggles.

When it comes to the Chinese market, where Huawei is the leading smartphone choice, Apple is now coming to terms with its decline.

Of course, this massive drop in value has caused a stir on Wall Street already, with multiple investment firms and analysts weighing in on what the future may hold for Apple - especially as the tech-giant, itself, points to uncertainty in the likelihood of further iPhone market penetration. "A lack of clear innovation in product design and functionalities compared to its predecessors and the high prices dampened the purchasing passion of Chinese consumers for the iPhone XS series", Flora Tang, an analyst at Counterpoint Research, wrote in November.

Growth in iPhone sales has been slowing for years as the global smartphone market has become saturated.

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