Apple's stark warning may be ominous news for China

Mobile phones

Image Consumers in developed economies are holding onto their phones for longer

Business Insider reported that Apple quit disclosing its iPhone single unit sales that same quarter.

In his letter, Cook lays much of the blame for Apple's troubles at China's door.

"The iPhone has been supporting the company for than a decade", said Roger Kay, analyst at Endpoint Technologies Associates.

Apple tried to soften the blow on Thursday by saying that spending in the company's app store hit a record high of more than $1.22 billion during the recent holiday season, but it wasn't enough to soothe anxious investors.

Apple shares fell 10% in New York Thursday, the biggest drop in nearly six years, after the warning.

Of course, it is nothing to do with Apple or the fact people don't seem to feel the need to pay over the odds for technology they can buy for less when last year's phone worked fine.

The significance of Apple's results is partly that it sheds a tiny bit of light on what's really going on in China - and how that might affect other firms and economies - in a country where top-line economic data given by the government are murky at best and fudged at worst. "There's a hole in Apple's product portfolio - they do not have a low-cost smartphone to fully exploit emerging markets". Furthermore, Cook conceded that the revenue from iPhone sales was lower than anticipated. (AAPL) are down more than 9% in NY trading after the company announced it will miss its revenue forecast for the critical holiday quarter.

However, he added that developed markets saw troubles as well, as fewer customers than expected chose to upgrade to Apple's newest phones.

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That's rocked the stock markets, and stoked fears of a slowing Chinese economy.

Munster and Thompson said it would take "a new product category", or large acquisition to allow Apple to regain its momentum.

"Apple's iPhones are facing a saturated premium smartphone market, with slowing growth rates and increased competition in China", Anshul Gupta, a research director at Gartner Inc., said last month when the firm released its latest smartphone sales tallies.

The Financial Times says that the company could be facing the biggest one-day drop in share price for five years. Amid Apple's problems in China, the Dow fell more than 300 points in early trading on Thursday.

The Dow Jones Industrial Average plunged 650 points on Thursday morning as Apple stock plummeted and Facebook, Amazon and Alphabet dropped about two percent.

"It looks like Apple is flouting Chinese law, which helps promote a boycott", Endlerle said.

Carolina Milanesi of Creative Strategies said Apple is unique among smartphone makers because it has a wide array of apps and services that produce revenue.

He also cited other factors that contributed to the drop in iPhone revenues such as consumers adapting to a world with fewer carrier subsidies, price hikes resulting from a stronger USA dollar, and lower price for iPhone battery replacements.

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