Apple loses $50B in market value after tech giant warns of rare revenues miss

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Apple has fallen victim to the Asian contagion, according to CEO
Tim Cook as sales in China plummeted.

Shares of the iPhone maker cratered nearly 8 percent in extended
trading Wednesday — knocking some $50 billion off the market cap
after the company took the unusual step of cutting its revenue
guidance.

In a letter to investors, Cook said that Apple expects to report
$84 billion in revenue during its next earnings report — it
previously forecasted $91 billion.

Cook placed the blame on “both macroeconomic and Apple-specific
factors,” and said that the iPhone maker failed to “foresee the
magnitude of the economic deceleration” in emerging markets. The
CEO never cited the $1,500 price point for the most expensive
model.

Indeed, Cook said that “over 100 percent” of Apple’s worldwide
revenue decline “occurred in Greater China across iPhone, Mac and
iPad.”

Cook also said that Apple hurt its bottom line when it slashed
the price of iPhone battery replacements early last year after it
was caught red-handed slowing down older iPhones to preserve their
aging batteries.

Consumers, he said, are taking advantage of the “significantly
reduced pricing” to extend the lives of their current phones and
avoid an upgrade.

“While Greater China and other emerging markets accounted for
the vast majority of the year-over-year iPhone revenue decline, in
some developed markets, iPhone upgrades also were not as strong as
we thought they would be,” Cook said.

Though Cook did not acknowledge the eye-watering prices of
Apple’s new iPhone XS and XS Max — which start at $999 and top out
at $1,449 — as a contributing factor to Apple’s woes, he did point
a finger at “US dollar strength-related price increases.”

He added that the ongoing extinction of carrier subsidies —
which reduced the sticker shock of expensive handsets — contributed
to the poor performance.

Sales of Apple’s cheaper iPhone XR have also been a thorn in
Apple’s side since it hit stores in late October. The Cupertino,
Calif.-based company has seen its stock drop more than 30 percent
as numerous parts and chip suppliers for the iPhone have slashed
sales forecasts.

The tech giant has gone as far as assigning members of its
marketing team to work full-time on boosting sales, and has upped
the amount it is willing to pay for devices traded in toward the
purchase of a new iPhone, according to a report earlier this
month.

As recently as last week, Apple was blasting out emails to
shoppers that advertised the XR at $449^[1] — provided
customers trade in an older device.

Shares of Apple were down 7.4 percent in extended trading, at
$146.

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