Apple Faces Possible Class Action Suit For Securities Fraud After Guidance Revision

Apple Faces Possible Class Action Suit For Securities Fraud After Guidance Revision

Apple Faces Possible Class Action Suit For Securities Fraud After Guidance Revision

Tim Cook, Apple's chief executive, said the company would report revenues of around $84bn (£67bn) for the three months to the end of December, usually a blockbuster trading period that comes after new iPhones are released.

Cook said that lower than anticipated iPhone revenue, primarily in China, accounts for all of Apple's revenue shortfall to its guidance and for much more than its entire year-over-year revenue decline.

Cook attributed the primary drop in revenue to challenges in emerging key markets - mainly China - and a waning in the sales of iPhones.

In fact, non-iPhone product revenues actually contributed to a 19-percent growth, except in China, where, according to Cook, a cooling-down economy hurt all kinds of Apple products (but still, iPhone the worst by far). The company has been dogged in recent weeks by reports of falling orders among its suppliers and questions about the strength of demand for the new, lower-priced iPhone XR.

"Although the company had some quarters over the past 20 years that missed Street expectations, in the modern iPhone era last night was clearly Apple's darkest day", he wrote in a note Thursday.

Fourth, we expected economic weakness in some emerging markets. The company also sees the traffic to retail stores and partner sellers in China declining in the quarter.

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Apple's surprise announcement added to concerns about the ability of USA companies, particularly its technology giants, to navigate an increasingly uncertain economy and a continuing trade war between the United States and China.

Cook also said that Apple hurt its bottom line when it slashed the price of iPhone battery replacements early previous year after it was caught red-handed slowing down older iPhones to preserve their aging batteries. The company previously projected $89 billion-to-$93 billion in revenue. It had, after all, predicted a record holiday quarter.

Apple has revised revenue forecasts causing shares to plummet 7%.

"And what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy", Cook said in an interview with CNBC.

Apple ultimately saw "fewer iPhone upgrades than we had anticipated" during the quarter, he wrote.

In fessing up to the looming fiscal disappointment, the Apple boss blamed the shortfall not on the eye-wateringly high prices for its latest lines of kit, but rather on the people of China, who let Apple down by not purchasing as many shiny doodads as was expected of them.

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