Trump to Apple: Make the iPhone in the USA, not China

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The tech behemoth had projected total revenue for the quarter to come in around $91 billion but now is forecasting about $84 billion.

Apple (AAPL) unexpectedly slashed its revenue forecast for the fiscal first quarter of 2019 on Wednesday, citing weakness in China and lower-than-anticipated iPhone revenue.

Cook said other factors will also pull down Apple's revenue, including the timing of its iPhone launches past year and a strong dollar that means lower revenues when converted to USA currency.

Cook didn't place all of the blame on China. Those include "consumers adapting to a world with fewer carrier subsidies, U.S. dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements", Cook wrote.

In response to these trends, the business is seeking to make it easier to trade in used iPhones at Apple stores, as well as allow payments to be made over a longer period. While we don't have the exact numbers, it's likely that many iPhone customers chose to pay the $30 to extend the life of their current handsets rather than shell out hundreds of dollars for a new model.

"During the previous shareholder conference, Apple estimates four major factors that would affect the company's performance in the quarter", said Cook.

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"The much larger issue is the slowing of the (Chinese) economy, and then the trade tension that has further pressured it", Cook said.

Click the audio player above to hear Marketplace reporter Ben Bradford on how Apple's services could make up for the tech company's softer smartphone sales. But Cook also mentioned fewer carrier subsidiaries on new iPhones, as well as the dramatically lowered battery replacement price for older models (due to Apple's iPhone slowdown drama from late 2017), as contributing factors.

Japanese shares tumbled and Shanghai's benchmark climbed Friday as Asian markets steadied following a technology-led sell-off on Wall Street.

The sell-off also affected luxury brands including UK-based Burberry - down 6% - as Apple said China's economic woes and trade war with the USA was weighing on consumers in the world's second biggest economy. The shares had already fallen 32 per cent from their peak in early October when investors still had high hopes for the new iPhone models. This comes a day after CEO Tim Cook announced a revision to Apple's revenue guidance for the last quarter of 2018. "All premium Android phones will have 5G in the first half of 2019, but iPhones will likely have to wait until Q4 of 2020", he noted. He added that overall, "consumption growth" is slowing down across China.

Cook blamed the lowered forecast on several different factors, including the timing of its latest generation iPhone launches, a strong United States dollar creating foreign exchange headwinds, supply constraints, and economic weakness in some emerging markets. Analysts had been expecting revenues of around $91bn, according to market analyst FactSet.

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