Apple CEO Tim Cook on Wednesday admitted poor demand for iPhones in several markets – especially in China.
Due to weakening demand for iPhones, Apple has its forecast to $84 billion in revenue for its fiscal first quarter ended Dec. 29, below Apple’s originally forecast revenue of between $89 billion and $93 billion.
The revenue drop for the just-ended quarter underscores how an economic slowdown in China has been sharper than many expected.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Apple CEO Tim Cook said in a letter to investors.
Cook told CNBC that Apple products have not been targeted by the Chinese government, though some consumers may have elected not to buy an iPhone or other Apple devices due to the firm being an American brand.
“Apple sales in China have not been doing well for a few quarters now, part of the reason is that their price points have gone too high – past the $1,000 mark,” said Kiranjeet Kaur, an analyst at market research firm IDC.
“(That’s) almost three times as expensive as phones from other vendors that are filling the mass market.”
China’s smartphone market has dropped sharply this year, with Apple and South Korean rival Samsung Electronics leading the fall, even as some domestic peers have performed more strongly.
Samsung said last month it would cease operations at one of its mobile phone manufacturing plants in China, after seeing its share of the Chinese market drop to 1 percent in the first quarter of 2018 versus 15 percent in mid-2013.
In November, Cook cited slowing growth in emerging markets such as Brazil, India and Russia for lower-than-anticipated sales estimates for the company’s fiscal first quarter. But Cook specifically said he “would not put China in that category” of countries with troubled growth.