Μwith an unexpected and simple announcement, o Tim Cook recently informed the global investing public that Apple sales in the last quarter of 2018 show a decline of 5% compared to the corresponding quarter last year. Something like this had been happening since 2016 and as expected, the markets reacted immediately to this announcement with Apple's share already trading at lower prices.
According to Tim Cook's letter to investors, sales of 4th quarter of 2018 is expected to close at € 73.93 billion against the € 78.33 billion originally projected. The festive season, which is traditionally Apple's strong point, does not seem to have yielded the expected revenue and the problem is mainly located in China.
China's wider market (including Hong Kong and Taiwan) "brings" it 20% of Apple sales, with the main product being the iPhone. But something does not seem to be going well in the Chinese market for Apple. On the one hand, it is unable to present a value proposition against the super cheap models of local manufacturers and on the other hand, consumers - probably influenced by the economic slowdown - are reducing their spending.
To this must be added the tension that has developed in recent months in US-China trade relations, which has made many US companies vulnerable and Chinese consumers wary of US products. In any case, the coming months will show whether this is something temporary or a permanent situation that will negatively affect Apple's financial position.
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