Apple Cuts Steerage for Newest Quarter; Shares Tumble

Apple Cuts Steerage for Newest Quarter; Shares Tumble

With a company as large and dominant as Apple, any uncertainty or concern in the company reverberates quickly and sharply throughout the company's supply chain.

A warning from Apple about a sales slump in China sent shockwaves through stock markets yesterday and prompted one market analyst to say that the surprise announcement marked Apple's "darkest day in the iPhone era".

But that's missing Apple's biggest problems, according to a new report from Nicolas Baratte and Cherry Ma, analysts at Hong Kong-based CLSA, who point directly to the iPhone's climbing average selling price (ASP) and increased competition from the likes of Huawei and others.

The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September past year to seize the No. 2 spot behind industry leader Samsung, according to the research firm International Data Corp.

Trader Mark Muller works on the floor of the New York Stock Exchange, Thursday, Jan. 3, 2019. That reversal of fortune could reinforce fears of a global economic slowdown. Macquarie restated a "buy" rating and issued a $214.00 price target on shares of Apple in a research report on Wednesday, September 12th. Counterpoint reported iPhone sales dropped by 17% year-over-year during the third quarter due to the weak initial performance of the new models.

"Our country is doing by far than than any other country in the world". The Nasdaq composite, which has a high concentration of tech stocks, declined 3 per cent to 6,463.50.

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"We believe the economic environment in China has been further impacted by rising trade tensions with the United States", Cook added. He described the change in how Chinese buyers see the future as "definitely worrying".

China, in short, is becoming like many other countries when it comes to smartphone buying trends: There is less natural growth left as fewer people are buying their first smartphones.

Weakness in Chinese demand is especially painful for Apple and other smartphone makers.

"This is just another little tea leaf as to the goings on behind the curtain in China and last night's PMI coming out weaker than people thought", said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors. Skyworks Solutions fell 5.4 percent.

Global stocks rose Friday and Wall Street was set to open higher after heavy losses this week, as investors welcomed news of trade talks between the USA and China and braced for data. And market data has shown that the contraction in Greater China's smartphone market has been particularly sharp. Chinese smartphone manufacturer Huawei enjoys a 24.6 percent share. Wechter Feldman Wealth Management Inc. boosted its stake in Apple by 29.1% in the 2nd quarter. While this might seem cheap to consumers who buy Apple's latest flagship smartphones each year (those now start at $999 and go all the way up to $1,449), the reality is that even $449 is quite pricey in the larger scheme of things.

USA indexes, which closed broadly lower on Thursday, were set to recover, too.

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