Apple Admits iPhone Has Failed In China; Company Loses $55 Billion As Stocks Take A Major Hit
Tim Cook, the CEO of Apple released an encouraging letter to the employees of Apple.
What with being sued for false advertisements and slowing down phones on purpose, seems like Apple is going through some rough stuff. With a seemingly heavy heart, Apple has now admitted to a lower than expected sales during the holiday quarter.
Huawei, of Chinese technology, recently surpassed Apple to be in the second spot through their flagship smartphones P20 and Mate 20, and all this despite being banned in selected countries.
Loss of $55 billion?
Tim Cook, the CEO of Apple, released an open letter to the investors of Apple revising the financial guidance for the holiday guidance, which fell short of expectations from the iPhone in the first quarter, mainly in Greater China.
Cook announced that he does not blame the ‘external factors’ for the lowered sale of iPhones than expected. He instead holds these accountable – ‘macroeconomic factors, and some specific to Apple and the smartphone industry.’ Another reason for the reduced sales might be significantly reduced pricing for iPhone battery replacements, as per Cook.
After countless years of expansion, the Chinese economy is decelerating. China made about 15% of the revenues globally, which now seems likeable to sink. The company’s shares were halted for a short period of time after hours before Cook’s letter was made public and when trading resumed, shares fell at no less than 8%, that makes up to loss of as much as $55 billion of the company’s stock market value.
Cook’s Letter to his Team
In the letter, he says, “We did not set a new record for iPhone sales in Q1, however, due to a number of factors — some macroeconomic, and some specific to Apple and the smartphone industry.” He also went on to say that he was proud of the newest innovations of Apple like iPhone XR, iPhone XS and iPhone XS Max.
The apparent downfall of the company will not be taken lightly, according to Cook, as this is an opportunity to learn, take action, and focus on their strength to deliver best products on earth for the customers and providing them with an unmatched level of service.
A Silver Lining
Looking at the brighter side of things, Apple’s first quarter was a record setter for revenue from Services, Wearables, Mac and iPad, whose revenue growth was almost 19 per cent year-over-year. In the letter, Cook says that the worldwide installed base of active devices also received a great response and broke all previous records, which reflects the loyalty of customers.