Apple sees sales largely below Wall St as iPhone demand weak

One Plus phone

Mr. Cook's rare warning to investors earlier this month revised the company's projected revenue for the first fiscal quarter of 2019 to US$84-billion, down from a range of US$89-billion to US$93-billion.

The stock closed down one per cent on the Nasdaq at US$154.68 but climbed in extended trading.

Apple is banking that investors will realize the company can still reap huge profits by selling various services on the 1.4 billion devices running on its software. While its revenue of US$84.3-billion represented a year-over-year decline of 4.5 per cent, it was slightly above the company's revised forecast from January 2.

Interestingly, Apple reported that its other businesses, collectively, grew by 19 percent.

So how did iPhone sales check in for the quarter gone boy?

In the company's defense, Apple announced just after New Year's Day that its revenue in the last quarter of 2018 would be lower than expected, but failing to address the bigger challenges and upcoming milestones in today's call was a major misstep.

Cook shrugged off suggestions that Apple had priced itself out of the market with the latest iPhone models, instead placing the blame on inflation and carriers who were no longer willing to subsidize the cost of phones out of their own pockets.

Even though Apple isn't giving sales numbers for the iPhone, iPad and Mac anymore, it did provide total revenue. Revenue for other hardware categories was up, with Mac, iPad, and wearables all selling better than expected.

But is Apple falling victim to its own famed reality distortion field?Credit: ShutterstockCertainly, iPhone sales for the three months ended December 29, 2019 look as grim as when Apple warned that phone sales had slowed down earlier this month. The stock gained almost 6 percent to $163.50 in extended trading after the report came out. Analysts were looking for $58.97 billion, according to data compiled by Bloomberg.

Results released Tuesday revealed the magnitude of the iPhone slump - a 15 percent drop in revenue from the previous year.

He went on to say that revenue was down five percent during Q1, but only down three percent at constant currency. "Most of the shortfall relative to our original guidance, and over 100 per cent of our worldwide year-over-year decline was driven by our performance in Greater China". CEO Tim Cook chose not to get into specifics. "I'm optimistic that the two countries will be able to work things out".

"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide", writes Cook. The company's active installed base ended 2018 at an all-time high, with 1.4 billion devices. "That's a great testament to the satisfaction and loyalty of our customers, and it's driving our Services business to new records thanks to our large and fast-growing ecosystem".

"We wouldn't change our position with anyone's", Cook reassured analysts during a conference call reviewing the past quarter and the upcoming months.

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