Both of these numbers may sound positive; however, Cook's original estimate from about 60 days ago now was that Apple could earn as much as $93 billion in the quarter.
The announcement, made in a letter from Cook to investors, comes after weeks of signals from inside Apple and its supply chain indicating the Cupertino, California-based company is struggling to sell the latest iPhones released in September. AMS, which makes facial recognition sensors for iPhone X, fell 17 percent.
"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China".
"Most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac and iPad", Cook wrote. The stock has dropped from its all-time high of $232.07 per share back in October, to its current trading price of just ~$143.84 per share.
But the biggest problems came from lackluster sales in China and equally disappointing iPhone upgrades.
Apple has issued its first profit warning since 2002, and the first since the company entered into the smartphone era.
Earlier, in Europe, shares in fashion firm Burberry were almost 6 percent lower.
Cook said the new iPhone models were released earlier than the flagship iPhone X last year, which created a hard year-over-year comparison.
Apple suppliers' shares tumbled on the news. Secondly, Tim Cook thinks the weakening USA dollar is to blame for Apple's lowered profits, as well as the company's flagship device, the iPhone, experiences its worst sales run in recent memory due to competition from overseas.
"We believe the economic environment in China has been further impacted by rising trade tensions with the United States". In announcing the new forecast, Cook said the Chinese smartphone market is contracting and noted that foot traffic to Apple retail stores has been down in recent months.
"This is just another little tea leaf as to the goings on behind the curtain in China and last night's PMI coming out weaker than people thought", said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors. Universal Display Corp. declined 3.5 per cent and Lumentum Holdings Inc. tumbled 8.7 per cent. Shares of USA retailers that sell Apple products were also weak on the news. Mid-level officials from the Trump administration are scheduled to travel to Beijing for talks early next week. Apple's market share has dropped to 7.5% in the third quarter from 11.2% in the first quarter, while Huawei has been in the lead with an average market share of 25.5%, according to IDC.
The company had not decreased its quarterly revenue forecast in over 15 years before Wednesday. It's also harder to lock in users within the iOS system in China, where proprietary Apple services, including iMessages and iTunes, aren't as popular as in the U.S.
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