BREAKING NEWS: Apple Sales Crash, New iPhones Fails To Deliver
Apple has had a big case of the wobbles with iPhones, their once mighty revenue earner and a category that represents more than 60% of their revenues has suddenly crashed.
Earlier today the US Company lowered its outlook for fiscal first-quarter revenue after an unexpected slowdown in demand for iPhones. Shares of the iPhone maker crashed nearly 8 percent in extended trading this morning knocking some $50 billion off the market cap after the news broke.
Chief Executive Officer Tim Cook delivered the bad news in a letter to shareholders who had expected revenues of $91.3 billion.
Since October they have fallen 32 percent amid growing concerns about the iPhone — by far Apple’s most important product line.
The problem is that Apple has been unable to innovate their way out of trouble. The problem is so bad that Apple has said it would stop reporting unit sales of iPhones, iPads and Macs beginning in fiscal 2019.
That sparked concern Apple wanted to avoid disclosing because of weak growth numbers.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote.
While Greater China and other emerging markets accounted for the vast majority of year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also weren’t as strong as the company anticipated, Cook said.
Cook also admitted that the number of people upgrading to new iPhones was “not as strong” as the company had hoped in developed markets such as Australia.
He also said that fewer carrier subsidies was impacting Apple a move that is also set to impact Telstra and Optus.
With Apple’s iPhone unit sales flatlining, Apple has shifted to trying to get consumers to pay more for each device. In October, Apple shocked investors by saying it planned to stop disclosing the number of iPhones sold each quarter.
In his letter to investors, Cook touted continued traction in Apple’s “non-iPhone businesses,” including wearable devices and supplementary services, like iCloud, Apple Pay and the App Store. But he admitted that the downward revision of its sales forecast is “disappointing.”