Apple blames revenue slump on slowing Chinese economy as iPhone sales slow

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According to a Reuters report, Apple reduced its forecast to $84 billion in revenue for the fiscal first quarter that ended on December 29.

Peak Apple Apple shares were temporarily pulled from trading on Wednesday as the Cupertino idiot-tax operation warned of lousy sales numbers on the horizon.

Cook said other factors will also pull down Apple's revenue, including the timing of its iPhone launches a year ago and a strong dollar that means lower revenues when converted to U.S. currency.

Cook attributed most of the revenue drop to China, where the economy has been slowing and where US tariffs have been raised on more than $200 billion in goods, although the iPhone hasn't been affected directly so far.

Apple Doesn't Understand the Real IssueApple CEO Tim Cook said that customers weren't upgrading to newer device models as quickly as the company expected.

That figure is 4.8% below the $88.3 billion revenue in the same quarter a year earlier.

However, he admitted that sales in more mature economies had also been disappointing.

Third, we knew we had an unprecedented number of new products to ramp during the quarter and predicted that supply constraints would gate our sales of certain products during Q1.

Apple's poor performance was echoed by its fello Faang companies - Facebook, Apple, Amazon, Netflix and Google - which all performed poorly in 2018.

"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", he wrote.

In addition, the holiday quarter was big for Apple's wearables business. Apple shares were down 7.5 percent in after-hours trading. The company previously projected $89 billion-to-$93 billion in revenue. The offer comes after Apple iPhone sales in China lost momentum in November, with shipments tanking 22.8% month-over-month and iPhone's market share dropping to 11.7%. In the letter, Cook says people are replacing batteries more than they are buying iPhones.

White House economic adviser Kevin Hassett said Thursday that "it's not going to be just Apple" that faces revenue shortfalls as a result of the trade tensions initiated by President Donald Trump between the United States and China.

However, Apple continues to be optimistic about China.

Tim Cook is reportedly hosting an all-hands meeting with every Apple employee today about the revelations regarding stalling iPhone sales.

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