Apple Cites "Mounting Uncertainty": APPL Down 7% AH, Nasdaq Futures Down 2.3%

Apple Blames "Mounting Uncertainty" in Rare Guidance Cut. Futures hammered.

Equity futures are getting hammered tonight after Apple Makes Rare Cut to Sales Guidance.

Apple Inc. lowered its sales forecast for its fiscal first quarter, a rare revision to its guidance, blaming slowing sales of smartphones and other devices in China.

Apple Chief Executive Tim Cook said in a letter to investors on Wednesday that the company now predicts revenue of around $84 billion for the quarter ended Dec. 29. Previously the company said revenue would be between $89 billion and $93 billion for the quarter. Analysts surveyed by FactSet forecast more than $91 billion.

“Most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Mr. Cook wrote.

“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” he wrote in the letter.

Uncertainty - What a Joke

Blaming uncertainty is a joke. No one can ever be sure of economic forecasts.

Facts of the Matter

  1. Apple sells a commodity.
  2. The competition has phones that are just as good, if not better, for cheaper
  3. At some point, consumers will no longer pay for a name.
  4. At some point, consumers decided new features are not worth the price.

Only Surprise

The only surprise is how long it took to get to points 3 and 4.

Looking Ahead

5G won't be a savior. Apple could easily fall in half from here.

Expect all kinds of unexpected negative surprises in 2019.

Recession looms.

Mike "Mish" Shedlock

Comments (40)
No. 1-22
ReadyKilowatt
ReadyKilowatt

The problem is a little more nuanced than “phones are a commodity.” It isn’t that phones are all the same, it’s that the apps are driving the product, and the apps are all just interfaces to their cloud service. We’ve come full circle, from mainframe to extremely personal computer (desktop then pocket), and now back to mainframe. But don’t call it a mainframe, now it’s “cloud computing” and the only way to make it work is to put as generic a UI and experience as possible. Not killing the battery or requiring a lot of local memory is a bonus too.

Enjoy your VT-100, idiots.

mkestrel
mkestrel

A lack of real leadership and stock buy backs.

Irondoor
Irondoor

The Trumpster-In-Chief will probably tweet something about AAPL tonight or tomorrow. The question is: what will he say? Will he say AAPL shouldn't have put all their eggs in the Chicom basket or opened plants there and should build a plant in the US? Or will he somehow throw AAPL a lifeline by tweeting about another fine phone call with President 11 where he mentioned that AAPL is a fine product and he appreciates President 11 not putting tariffs on AAPL products?

Whatever he tweets, it has one objective and one only; pump up the stock market.

Bam_Man
Bam_Man

To anyone whose financial future depends on the continuing strength of this so-called stock "market" - I truly fear for you and wish you the best.

shamrock
shamrock

apple does not sell a commodity, samsung sells a commodity. But technology is supposed to get better AND cheaper, instead apple wants 4 figures for a phone that has a better camera but many times has features that people like removed.