Apple stopped trading its stocks this morning because it has done nothing that has not been done for more than a decade. In the meantime, Tim Cook made a surprising concession.
Apple’s share price frustrated after trading in the US market this morning as investors worried that the company had reached its peak.
Due to lower-than-expected demand for its most popular devices, especially China, consumer technology giants announced that they will not meet their revenue targets, so Apple shares are suspended. The company expects revenue in the first quarter to be $84 billion, lower than the expected $91.5 billion.
After becoming the first company to reach a $1 trillion valuation last year, Apple’s value in recent months has been broken. The company announced in November that it would no longer offer its iPhone, iPad and Mac unit sales every quarter – a practice that has been maintained for decades and investors are particularly scared.
In a letter to investors this morning, Apple CEO Tim Cook took a rare downgrade prediction step and explained the reasons for the company’s mistake. According to the dataset, the last time it had to do such a thing was 2002 or 2004. So, it has been around for a while. Cook wrote: “The lower-than-expected in iPhone revenue, mainly in Greater China, occupies all of the income gaps we have guided, far exceeding our annual revenue decline.”
“Although Greater China and other emerging markets accounted for the vast majority of iPhone revenue declines, in some developed markets, the iPhone upgrade was not as strong as we might think.”
Interestingly, Apple believes it offers a discounted battery replacement because it deliberately slows down the speed of the old iPhone and also suppresses new iPhone sales. “We believe there are other factors that have broadly affected the performance of our iPhone, including the consumer’s ability to adapt to lesser operator subsidies in the world, the price increase associated with dollar strength, and some customers taking advantage of significantly lowering iPhone battery replacement prices.”
Some commentators quickly seized the battery replacement concession. “Tim Cook finally said: The fix hurts Apple’s profits,” wrote Mahson Koebler, editor-in-chief of Motherboard. Tech reporter John Gruber has widely reported the company and he is surprised by this recognition. “Not sure if Cook should list this as a reason for lower-than-expected iPhone sales. Of course, this sounds like the old way of dealing with battery degradation is to get people to buy new phones,” he wrote on Twitter.
Apple also cited “restrictions” on some products, including its latest Apple Watch and iPad Pro, which dragged down revenue.
Tim Cook has faced serious problems in filling the ability of Steve Jobs, the predecessor who died in 2011. Despite the lack of breakthrough product innovation during his tenure, Mr. Cook has overseen the growth of Apple’s business services segment. Includes Apple Music,iTunes, Apple iCloud and Apple Pay. He said that the company is expected to “double the size of this business from 2016 to 2020.” Apple boss also pointed out that the number of Apple users is more than at any time in history. The company earns revenue by keeping users in its ecosystem, such as Google’s search fees paid to Apple through its Safari web browser or Siri.
Cook wrote: “The base of active devices we have installed has reached a record high – more than 100 million units in 12 months.” “Apple devices are used more than ever, which proves the continued use of our customers.” Loyalty, satisfaction and participation.”