On 2nd January, Apple’s CEO, Tim Cook, issued a revenue warning for this quarter to investors, and pointed to challenges in China as being one of the main downward driving forces.
Bearing in mind that Apple is one of America’s (and the world’s) tech giants, and that it became the world’s first trillion-dollar public company back in August 2018, it has been somewhat of a surprise to hear that its share price has tumbled more than 20% since October, and that the company has now sent a revenue warning letter to its investors revising down its expected earnings for this quarter. In the letter, Mr Cook pointed to the unforeseen “magnitude of the economic deceleration, particularly in Greater China” as one key reason why a previously predicted rise in revenue had now turned into warnings of a fall in revenue.
What’s The Problem?
Tech market analysts and commentators have cited several reasons for Apple’s woes and the link to the Chinese market, including:
What Does This Mean For Your Business?
Apple products and services are known for their quality, reliability, ease of use, and useful features, and many UK businesses / business people will continue to use them. It is difficult to deny, however, that many new Android phone models, such as those from Huawei or Samsung, offer UK buyers great value for money and useful features compared to Apple’s relatively high-priced alternative. This, combined with Apple’s reliance on getting a large part of its revenue in a country (China) where it is facing stiff competition and trade-war pressures are contributing to a challenging time for Apple.
It is, however, worth remembering that Apple is a trillion-dollar tech giant and is better placed than most to weather any storms and find ways to develop new opportunities and revenue streams.