Economy

Cooked: Apple shares spiral as investors launch 'securities fraud' lawsuit

Cooked: Apple shares spiral as investors launch 'securities fraud' lawsuit”

A key White House adviser said in response that the ongoing tensions were going to mean that a "heck of a lot" of United States firms with sales in China - not just Apple (Swiss: AAPL-EUR.SW - news) - would see their earnings downgraded until the two countries reach a deal.

The Financial Times says that the company could be facing the biggest one-day drop in share price for five years.

After Apple's first revenue warning in almost 12 years, investors also dumped chipmakers and tech stocks and flocked to perceived safe havens like U.S. Treasuries and the Japanese yen.

Tim Cook issued a letter to shareholders, warning that "our revenue will be lower than our original guidance for the quarter".

Apple now expects to achieve sales turnover of approximately $84 billion in the final quarter of 2018 (Q4), compared with the company's earlier revenue forecasts of between $89 billion and $93 billion.

Apple Inc AAPL.O shares plunged 10 percent on Thursday after the iPhone maker blamed weak China demand for a holiday-quarter revenue shortfall, with many investors anxious the rare stumble was a harbinger for slowing global growth. The flagship of the 2018 lineup, the iPhone XS Max, starts at $1,099-compared to the $769 starting price of the 2016 flagship, the iPhone 7 Plus.

"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.

Apple's bombshell news - a sharply weaker revenue outlook and lower iPhone sales - has raised questions over the future of the California giant, which until recently had been seen as the undisputed innovation leader in the tech sector. It's also harder to lock in users within the iOS system in China, where proprietary Apple services, including iMessages and iTunes, aren't as popular as in the U.S. In November, the company said it would stop reporting unit sales of iPhones, iPads and Macs beginning in fiscal 2019.

Apple, which was until recently the largest publically trade company in the U.S., is now worth less than Microsoft, Amazon and Google's parent company, Alphabet. However, Cook admitted to staff that Apple didn't set a new record for iPhone sales in Q1. -China trade tensions, but said the company won't "sit around waiting for the macro to change" in an interview with CNBC.

Apple and the White House didn't immediately respond to requests for comment.

To help boost iPhone sales, Mr Cook said Apple will expand its financing plans and build upon its recent efforts to make it easier to trade in older models at its stores.

The firm had warned investors in November that a strengthening dollar and economic weakness in some overseas markets would be likely to hurt sales in the last three months of the year.



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