Apples rare sales warning sparks iPhone fatigue fears

first_imgAngela Lang/CNET Apple’s new lineup of iPhones didn’t have a happy holiday. And a rare sales forecast slash may bode poorly for the rest of the year.In a letter to investors on Wednesday, Apple CEO Tim Cook warned that the company’s fiscal first-quarter revenue would be weaker than previously expected. It now sees sales of $84 billion, well below the range of $89 billion to $94 billion that it forecast in November. Its gross margin is now expected to be approximately 38 percent, a tick below the range of 38 percent to 38.5 percent range it previously forecast, suggesting a shift to lower-priced, less profitable products.A warning from Apple, one of the most valuable and profitable companies in the world, is a rare occurrence that hasn’t happened in at least 15 years. The weaker holiday season — a critical period in which most of Apple’s iPhones are sold — will fan growing belief that the company is struggling with consumer fatigue for its popular smartphone and that sales may be on a downward slide. The company raised a red flag in November when it said it would stop disclosing how many units it sells each quarter. “iPhone units are likely down, and I believe prices on the more premium, higher-priced phones are down due to holiday discounting,” said Patrick Moorhead, an analyst at Moor Insights. The warning prompted concerns similar to those Apple endured more than a decade ago, when it missed its fiscal fourth-quarter numbers amid an economic downturn. Then-CEO Steve Jobs broke his practice of skipping analyst calls in order to quell investor fear, reiterating that Apple would be fine. (He was right.)That hasn’t stopped detractors from jumping on the warning. On Wednesday, law firm Bernstein Liebhard said it was investigating whether Apple mislead investors and committed securities fraud. An Apple spokesman wasn’t immediately available to comment on the law firm’s actions.Apple shares fell 7 percent to $147 in trading after the market close on Wednesday. On Thursday morning, shares fell another 9.5 percent to $142.88, before rebounding 1.6 percent to $144.52 in early Friday trading.Blame ChinaThis time, the economic downturn isn’t in the US. Cook blamed much of the shortfall on China, where the company underestimated a decelerating economy. The company saw a decline in sales of iPhones, Macs and iPads in the country.Cook cited macro factors like trade friction between the US and China, the world’s two biggest economies.”We believe the economic environment in China has been further impacted by rising trade tensions with the United States,” Cook said. See It $999 CNET may get a commission from retail offers. Aug 31 • Your phone screen is gross. Here’s how to clean it Apple Aug 31 • iPhone XR vs. iPhone 8 Plus: Which iPhone should you buy? 7:35 See All Comments See It Apple iPhone XS What to expect from Apple in 2019 $999 Beyond demand in China, Cook also blamed a decrease in carrier subsidies, price increases in foreign markets caused by a strong US dollar and customers taking advantage of cheaper battery replacements. Cook pointed the finger as well at a slowing smartphone market, which has taken a toll on other big players, like Samsung. But Avi Greengart, an analyst at Global Data, says Apple’s not taking into account the rise of players like China’s Huawei, the second-largest phone maker in the world. Or Oppo, which owns the hot upstart player OnePlus. “Apple does have a strong franchise in China, but it is not immune from competition,” Greengart said.In an interview with CNBC, Cook said a host of new products introduced in the quarter contributed to the sales miss.”We had an unprecedented number of new products during the quarter. We had new watches, we had new iPad Pros,” Cook told the financial network. “Both of these were constrained for all or most of the quarter.”Still, he remains bullish.”We had sort of a collection of items going on.” Cook told CNBC. “Some that are macroeconomic and some that are Apple-specific. And we’re not going to sit around waiting for the macro to change — I hope that it does and I’m actually optimistic — but we’re going to focus really deeply on the things we can control.”Questions about demandApple was already facing questions about demand for its next lineup of iPhones. In the latter months of 2018, Apple introduced the iPhone XS and iPhone XS Max, which offered modest upgrades like a faster processor and, in the case of the Max, a big size increase. The other new product was the lower-priced iPhone XR, which came in different colors and cost less than the iPhone XS because of its cheaper components. Addressing concerns that the new iPhones weren’t selling well, Apple said the iPhone XR has been its top-selling iPhone since its launch, which came a month after that of the iPhone XS and iPhone XS Max. But the iPhone XR sits in an awkward position. It doesn’t have the latest and greatest specs to satisfy the hardcore Apple fanboy, but at $750, it is still an expensive upgrade for consumers used to a baseline $650 for a new iPhone. In the meantime, Apple’s older iPhone 7 and iPhone 8 models remain available for consumers who don’t want to break the bank for a new smartphone. Apple has been shifting its strategy so it’s less reliant on the iPhone and generating more of its revenue from services like iTunes, the App Store and its upcoming streaming video service. “The services business will have a longer impact than hardware sales,” said Carolina Milanesi, an analyst at Creative Strategies.First published Jan. 2 at 1:42 p.m. PT. Update 1:57 p.m.: To include further detailsUpdate 2:14 p.m.: To include further details, stock market price and background.Update 2:55 p.m.: To include analyst comments.Update 3:10 p.m.: To include further comment from Tim Cook from a CNBC interview.Update 4:40 p.m.: To include more Tim Cook comments.Update Jan. 3 at 6:40 a.m.: To include a new stock quote and analyst comment.Update Jan. 4 at 6:42 a.m.: To include new stock quote and detail about law firm investigation. Apple: See what’s up with the tech giant as it releases new iPhones and more.Does the Mac still matter? Apple execs explain why the MacBook Pro was over four years in the making, and why we should care. Now playing: Watch this: Tags Aug 31 • Best places to sell your used electronics in 2019 See it Review • iPhone XS review, updated: A few luxury upgrades over the XR Boost Mobile $999 $999 See It Sep 1 • iPhone 11, Apple Watch 5 and more: The final rumors Share your voice reading • Apple’s rare sales warning sparks iPhone fatigue fears • Mentioned Above Apple iPhone XS (64GB, space gray) Phones 77 Sprint Best Buy Preview • iPhone XS is the new $1,000 iPhone X Applelast_img read more

Everybody indirectly corrupt Muhith

first_imgAbul Maal Abdul Muhith. File PhotoFinance minister Abul Maal Abdul Muhith on Thursday observed that everybody in the country is indirectly involved in graft, reports UNB.Addressing the inaugural session of the Anti-Corruption Commission’s (ACC) hotline service at its head office in the capital, the finance minister stressed the need for applying modern technologies to check graft.”The optimum use of technologies will help reduce corruption… there’s a big scope to minimise corruption in different sectors, including public procurement, by using technologies,” he said.Mentioning that the people who have power are involved in corruption, the finance minister said everybody is indirectly involved in graft. “Corruption is there in our blood… we’ve bogged down in this menace.”Noting that many times people are forced to get involved in corruption, Muhith said, “There was no corruption culture in Bangladesh in the past. Once it used to take place in secret…it was a matter of shame. But, now it happens openly.”He said a former ACC chairman had announced crusade against corruption, but failed to bring any change. “Well, you must investigate but don’t be a jihadist as it destroys the quality of investigation,” he asked the ACC investigation officers.Muhith said once public servants use to live a very simple life but now government salary means ‘beautiful livelihood’, observing that government employees are now changing their mindsets to keep themselves away from graft. “I hope a positive change will come over the next 8-10 years in this regard.”Speaking on the occasion, ACC chairman Iqbal Mahmood said corruption is a big problem for the country and that is why the ACC launched a hotline so that people can lodge their complaints dialling 106 from their phones free of cost.”People can directly communicate with the commission through the hotline and we can take action immediately as per their allegations,” he added.Earlier, Muhith inaugurated the ACC’s hotline by making a phone call to the ACC’s Complaint Centre dialling 106.last_img read more