Apple cuts short forecast, blames China for slowdown

Company - Mohit Shah - Jan 03,2019

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apple cuts short forecast blames china for slowdown

Apple has been distressed as investors are informed about sales slowdown due to economic paleness in China.

The iPhone maker provided a sudden disclosure about its future revenue expectations of about $84bn (£67bn) for a duration of three months till 29 December.

In the month of November, the tech giant held a prediction of sales close to $89bn; however, this forecast had already dissatisfied investors.

But surprisingly, Apple's share price dipped by more than 7% during after-hours trade, ranging close to 28% slip since November.

Apple reported sales of $88.3 billion during the fiscal first quarter, almost a year earlier. Hence, the new estimate highlights that Apple is reporting a slowdown during the holiday quarter for the first time since the appointment of CEO Tim Cook in 2011.

A letter delivered to investors on Wednesday, Tim Cook informed about the firm's sales issues that were primarily spotted in the Greater China region; this included Hong Kong and Taiwan which accounted for almost 20% of the company’s overall revenue.

The cut in forecasted sales experienced on Wednesday launched the first incident when Apple has reviewed its guidance to investors during a time span of 15 years.

Further, there have been serious doubts about the company’s prospects which have significantly troubled investors in the past few months, subsidizing to the wider market sell-off.

According to analysts, Apple was indeed vulnerable to the impacts of the US-China trade war, which indeed posed a risk of hushing away Chinese buyers from US brands.