Apple predicts $9bn revenue drop due to poor iPhone sales in China

  • Apple appears to be facing a very rocky start to the new year, predicting a drop in revenue of $9 billion in the first quarter of 2019 due to poor iPhone sales. 

    Apple has ruled the roost of technology for as long as we can remember. With its long series of iPhones and iPads to Apple Watches and TV’s, the technology giant has continually adapted to trends and have kept the tech fanatics hooked on the newest models. Things may not be looking too good for the tech giant this year, however.

    The Next Web reports that a recent letter from CEO Tim Cook has set out the expectation of a significant drop in revenue of $9 billion in the first quarter of this year, decreasing from previous projections fo $93 billion to a revised estimate of $84 billion. The drop-in revenue has been blemed on poor iPhone sales in 2018 and an economic slowdown in the Chinese market due to trade tensions between USA and China.

    CNBC reported that whilst there were challenges anticipated in the market, “the deceleration in Greater China” was a surprise to many. CEO Tim Cook similarly blamed the Chinese market, commenting that "over 100 per cent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."

    This is the first earnings warning that has been received since 2002 according to an avid Apple Blogger John Gruber. These numbers reveal that the strategy that Apple is taking may well have to change, whether that is via product portfolio expansion or moving away slightly away from having the iPhone as the largest business focus. Despite a decrease in revenue that may be thought of as small, this being the first warning has been a real eye-opener for the team and of course for CEO Tim Cook.

    SOURCES: Telecom Article, The Next Web Article, Silicon Republic, CNBC

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