Apple Inc on Wednesday cut its sales forecast for its latest quarter, with Chief Executive Tim Cook citing slowing iPhone sales in China.
The news sent Apple shares tumbling in after-hours trade, which skidded by 7.7 percent and dragged the company's market value below 700 billion U.S. dollars, and triggered a broader selloff in the stock market, with the S&P 500 futures down 1.5 percent.
“The much larger issue is the slowing of the [Chinese] economy, and then the trade tension that has further pressured it,” Cook said.
Cook said 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 device because it is an American company.
Some analysts, however, questioned the impact of Apple's own actions.
Apple tends to set its prices in U.S. dollars and charge a broadly equivalent amount in local currencies.
“The question for investors will be the extent to which Apple's aggressive pricing has exacerbated this situation and what this means for the company's longer-term pricing power within its iPhone franchise,” James Cordwell, an analyst at Atlantic Equities, told Reuters.
Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Cook's comments on how the U.S. trade tensions with China were hurting the company's outlook “might be a dig at [U.S. President Donald] Trump, but mostly he may be using the trade turmoil as an excuse for some missteps they've made over the last year.”
The company forecast 84 billion U.S. dollars in revenue for its fiscal first quarter ended December 29, which is below analysts' estimate of 91.5 billion U.S. dollars, according to IBES data from Refinitiv. Apple originally forecast revenue of between 89 billion U.S. dollars and 93 billion U.S. dollars.
Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.