Apple shares tumble on concerns of slowing iPhone demand worldwide

04 November, 2018, 19:48 | Author: Eric Barnett
  • The Citibank 10 percent cashback is valid on iPhone models bought via offline stores

Its fourth quarter results, covering the three months to October, showed Apple sold fewer iPhones than analysts had expected - nearly 47 million - but revenues and profits all smashed forecasts. Though Apple saw impressive revenue growth and completely demolished earnings estimates, Apple shares were down, in part, because iPhone unit sales remained somewhat unchanged year over year.

Apple on Thursday reported underwhelming iPhone sales and gave soft guidance for the holiday quarter.

The dip in Apple's shares to $208.50 knocked around $67 billion off its value, and put Amazon and Microsoft Corp (MSFT.O) back in the mix in the race among the United States' big tech players to be the world's most valuable company.

Apple's decision to hide the sales of iPhone, iPad and Mac in terms of unit, also hints about the rainy days Apple could be witnessing in the quarters to come - sales of iPhone going negative. Apple Inc. reports earnings Thursday, Nov. 1.

- Starting in 2013, Apple stopped breaking out Mac revenue into both laptops and desktops.

When asked about how Apple plans to continue growing its services business, CFO Luca Maestri highlighted the "exponential trajectory" of all of Apple's services from Apple Music to the Apple Store to Apple Pay. "Time for investors to adjust to the new disclosures", analysts from the firm said. "Obviously, we would like to see that be a huge growth".


The change is in line with how Apple already treats other hardware sales - such as those of the Apple Watch and HomePod - which it groups together rather than revealing sales in individual categories.

"While it's frustrating how Apple, with no warning, made a decision to pull the plug on unit metrics, our core bull thesis does not change on the story and to some extent is emboldened by the (approximately) $800 (average selling price) story and a robust services business poised to hit $50 billion-plus in (Apple's) 2020 fiscal year", Ives said.

For that reason, he expects Apple's stock to fall slightly out of favor, at least until the new reporting structure is fully digested.

The Cupertino, California company's struggle to break through with India's 1.3 billion consumers swung more sharply into focus this week after Apple blamed a disappointing set of sales forecasts on a handful of big emerging markets.

But shares were trading down 5% after-hours after it forecast $89bn-$92bn of revenue in the current October-December quarter though analysts questioned whether Apple was being deliberately cautious in its guidance. During the September quarter of 2017, Apple posted revenue of $52.6 billion.

Heads up, Apple device owners: An upcoming pilot program may help you get more life out of your old gadgets. The iPhone still looms large over Apple's fortunes, accounting for more than 60 percent of revenues. Maestri also cited Apple competitors which did not disclose sales figures. Apple stocks plunged another 6.7% after the conference call.

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