Apple Stock Sinks After iPhone Sales Forecast Cut
The tech giant saw its share price fall 9 percent after warning its first quarter sales forecast will fall short of analyst projections.
Apple shares plunged on Thursday morning after the tech giant slashed its first-quarter revenue forecast.
The iPhone maker's stock fell by $14.23, or 9 percent, to $143.69, on the NASDAQ. The collapse in Apple's share price followed analysts cutting their own sales forecasts for the company, in part due to weaker than anticipated iPhone sales foreseen in China and other emerging markets.
Apple CEO Tim Cook wrote a letter to investors on Wednesday in which he said the company would cut its first-quarter sales guidance for the three months of its fiscal first quarter (October through December). The company now says that it expects revenue of around $84 billion, compared with the original range of $89 billion to $93 billion.
"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. "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."
In recent years, Apple has focused on growing revenue from services like Apple Music, iTunes and Apple Pay in an effort to become less reliant on the hardware sales that were once its bread and butter.
But Cook's warning to investors this week is a sign that iPhone sales, often for higher-priced versions that retail for $1,000 or more, remain key for the tech giant, and are starting to wane, especially in emerging markets.