Apple iPhone sale is not as many as expected number earlier forecasted. According to the revised first quarter projection, the shortfall is huge enough to lower Apple’s revenue estimates by billions of dollars.
The giant tech company lowered its guidance by a whopping $9 billion, going from the projected $93 billion. So the new estimate is now $84 billion.
The Blame for iPhone Weakness
According to a letter by Apple CEO Tim Cook, “Lower than anticipated iPhone revenue, primarily in Greater China, is because of slowing Chinese economy and US-China trade tensions.”
Apple stock was briefly halted and the share price plumb to 10 points after one hour of trading. The only good news for Apple is that aside from iPhone, iPad wearables, Mac and services grew by 19%.
Well, China is not only the problem. Apple’s temporarily price cut for battery replacement service in older iPhone and the strength of the US dollar are other factors contributing to the shortfall.
In a CNBC interview, Cook also cited the fewer carrier subsidies. In the US, for instance, a new iPhone is not $199 on contract anymore because it has changed a while ago. The contract is hitting new upgraders for the first time.
Cook says, “There are not as many subsidies as there used to be from a carrier point of view.” “That did not happen yesterday; if you were out of market for a few years and you come back, it will look like that to you.”
We expect to have more words from Cook and company, and also have the final numbers when Apple holds its next official earning conference call towards the end of January, on Tuesday, January 29. Until then, we hold on to the data we already have.