The 1 trillion dollar valued company, Apple, on Wednesday experienced a steep fall in its market value — below $700 Billion.
This happened after CEO, Tim Cook, for the first time ever, issued a warning on its revenue guidance ahead of releasing quarterly results.
He said, “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Chief Executive Officer Tim Cook said in a letter to investors. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”
The company forecast revenue between $89 billion and $93 billion for its fiscal first quarter but ended below analyst’ estimate — $84 Billion, according to IBES data from Refinitiv.
Although Cook specifically said he “would not put China in that category” of countries that caused it’s revenue shortfall, he cited slowing growth in emerging markets such as Russia, India, Brazil, fewer iPhone upgrades and weak sales in China.
Apple is known for unpredictable revenue, as its share price fluctuates regularly, unpredictably, making it difficult for short term trading.
Recently, Chinese government ordered its citizens not to buy iPhones due to patency issues with the chip manufacturer Qualcomm.
The Chinese court gave a preliminary order banning the importation and sale of several Apple iPhone models in China that they court found to have violated Qualcomm’s patents.
Although Tim says China is not the cause of its shortfall, a major sales fall in China can affect Apple’s revenue to some extent.
