Dow Falls 660 Points as Apple Stokes Global-Economy Worries

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"It is true that China has had a broad slowdown but the Apple weakness is more to due to company specific factors. We grew 16%, which we're very happy with. iPhone in particular was very strong, very strong double-digit growth there'". While we don't have the exact numbers, it's likely that many iPhone customers made a decision to pay the $30 to extend the life of their current handsets rather than shell out hundreds of dollars for a new model.

But the uptick didn't continue.

Chief Executive Officer Tim Cook said sales will be about $84 billion in the quarter ended December 29, down from earlier estimates of $89 billion to $93 billion. That sparked concern Apple wanted to avoid disclosing weak growth numbers. A chunk of this year's worldwide sales decline for iPhone and iPad occurred in China, according to Cook's letter. 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.

Apple attributes disappointing sales to the slowdown of China's economy. Trade tensions between Beijing and Washington have also intensified with tit-for-tat tariffs.

"The firm alleges that Cook's letter blaming business in China for the revenue shortfall is contrary to what he told investors during the company's fourth quarter conference call on November 1, where Cook is quoted as saying, "[Our] business in China was very strong last quarter.

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Bhansali has argued that consumers are no longer seeing the value for new models of Apple products, like the iPhone XS and MAX, which were more expensive than the iPhoneX, which she says itself was a disappointment. And market data has shown that the contraction in Greater China's smartphone market has been particularly sharp. China's smartphone market has been down 6% year-over-year in the third quarter of 2018 and is expected to drop by 3% in the fourth quarter of 2018, according to IDC. In China, there were less than 100 million smartphone shipments in the first three months, and the second quarter saw a 5.9% year-over-year decline.

Trading in the company's shares were temporarily halted as Tim Cook, Apple's chief executive, issued a letter to shareholders explaining the reason for the change. When the suspension on selling was lifted, Apple shares fell 7.45%.

Apple shares have plummeted after CEO Tim Cook revealed that the iPhone maker expects a drop of up to $9bn in revenue compared to its November report. The revenue revision, which came late Wednesday, led markets lower around the world and also triggered a slump for Asian suppliers and a wave of lower price targets from Wall Street.

Hall then points to a similar theme present in Cook's memo, in which the Chief Executive specifically wrote that Apple's finding it more hard than ever to get users to upgrade to the latest iPhones - although certain models are still flying off shelves.

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