Dow Jones Crashes 600 Points After Apple Issues Gloomy Sales Forecast

Dow Jones Crashes 600 Points After Apple Issues Gloomy Sales Forecast

Cook warned that the company's latest revenue guidance would be lowered to $84 billion.

Estimates from research company IDC showed smartphone shipments to China fell 10 percent from a year earlier in the quarter that ended in September.

Production cuts by major suppliers had led to worries that the firm's newest phones were not gaining traction among buyers, in part due to high prices.

According to Business Insider, $450 billion has been wiped from Apple's value since the company hit its peak on October 3. These included the strength of the United States dollar, in addition to "challenges" in emerging markets such as those in Asia.

Cook blamed a number of issues, including lackluster iPhone sales, but also pointed to Trump's trade war with China. Other brand names such as Ford Motor Co. and jeweler Tiffany & Co. already have reported abrupt declines in sales to Chinese buyers.

China is looking to push ahead with its rollout of a faster 5G network, with a pre-commercial phase this year and a commercial network in 2020.

Apple shares were down 8% early Thursday. And auto sales in the biggest global market are on track for their first annual decline in three decades after plunging 16 percent in November. Not for the $1,100 price tag, mind you, but rather the ungrateful carriers who weren't willing to torch their share of the profits and consumers who wanted to fix their suddenly dying batteries. A functional iPhone 7 Plus with the same amount of storage can get a trade in value of 1939 yuan ($282).

Still, the market seemed to be caught off guard. The drop in sales was also not entirely a surprise.

Shares of US -based Apple suppliers and chipmakers including Cirrus Logic Inc CRUS.O , Skyworks Solutions Inc SWKS.O , Analog Devices ADI.O , Broadcom Inc AVGO.O , NXP Semiconductors NV NXPI.O and Micron Technology Inc MU.O all tumbled.

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Kay said the trillion-dollar valuation was "irrational" and based on growth projections Apple is unlikely to achieve without a new catalyst.

"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", wrote Cook.

Some analysts point the finger at Apple itself, and its pursuit of constantly increasing iPhone prices. Investors fear a slowdown of the world's second largest economy, which has been under pressure from a trade dispute between Washington and Beijing.

President Donald Trump made his first comments on Apple's this Friday - and they were largely dismissive.

"That is having an impact on earnings and it's not going to be just Apple", he said. "China trade war is making things worse".

Meanwhile, Huawei and Oppo - two of Apple's competitors in Chinese markets - have reported higher valued market shares within the previous year.

The company had not decreased its quarterly revenue forecast in over 15 years before Wednesday.

Apple said that it expects weak iPhone sales in other emerging markets, driving down revenue despite some positive signs in developed markets and in its other products and services.

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