Apple shares are down by almost 10 percent this morning after the company announced yesterday that it would be revising its Q1, 2019 earning guidance by $9 billion due to weak iPhone demand in China.
While analysts were already expecting a decline in iPhone revenues, the market was not expecting Apple to go ahead and revise its earnings estimate itself and that also by such a huge margin. Apple shares are likely to decline even further today as investors are not going to like the news of weak iPhone sales lightly.
Back in August last year, Apple shares peaked at 233.47$ and helped it to become the world’s first trillion dollar company in the world. But since then its shares have only been declining steadily. The drop since yesterday’s announcement is among the worst though and it is unlikely to recover anytime soon.
Apple’s CEO Tim Cook will be holding an internal all-hands meeting with Apple employees later today (Thursday) to address the lowered revenue estimate. In an internal memo, Cook revealed that while iPhone sales might have been slow in China, the company saw a record number of iPhone activations in the United States and Canada this Christmas. He also noted that revenue from Apple’s Services, Mac, and Wearables business set a new record. As iPhone sales slow down, Apple’s other businesses are going to have an even bigger contribution in its revenue.
Apple suppliers have also been reeling from the slow iPhone sales over the last few months. Their shares have also declined considerably and they have also had to lower their earnings for the usually lucrative holiday season.