Apple stock: Why are Apple shares suddenly plunging? What did Tim Cook say about China?
SHARES in Apple have suddenly begun to plunge, but why is this? What did Apple CEO Tim Cook say about China?
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Why are Apple’s shares suddenly plunging?
In a letter to investors, Apple said it anticipated revenue of about $84bn (£67bn) for the three months to 29 December.
This follows a prediction in November which forecast sales of at least $89bn - something which had already struck a bad note with investors.
Apple's share price then sank more than seven percent, adding to its more than 28 percent dip since November.
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The festive season is usually the technology giant’s strongest quarter.
The predicted revenue of $84bn would represent an almost five percent fall compared to the same period last year.
It also marks the company’s first year-on-year quarterly decline since 2016.
The economic slow down in China and their tensions over trade with the US were blamed for Apple’s downgrade to its first-quarter sales.
Mr Cook wrote in his letter to investors: “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China.
“In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac and iPad.
“China’s economy began to slow in the second half of 2018. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years.”
The Apple leader mentioned the US-China trade war which he blamed for affecting the economic environment.
He continued: “We believe the economic environment in China has been further impacted by rising trade tensions with the United States.
“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed.
“And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp.”
However, all is not lost as Mr Cook predicts a “bright future" for Apple’s business in China.