Apple has shocked investors after a rare sales warning, with Apple CEO Tim Cook writing that the company’s fiscal first quarter of revenue would be around $9 billion less than expected. Sales are now expected to hit the $84 billion mark for the three months, with an expected gross margin of 38 percent.
Such a warning hasn’t happened in the past 15 years of the company, which caused Apple’s stock to drop by 10%, marking its worst trading day in the past 6 years.
So why the drop? Well, Tim Cook placed much of the blame of China, where he says a decelerating economy has caused a significant decline in sales. He also pointed the finger at the trade friction between the US and China and the increasing number of consumers opting to replace their iPhone batteries rather than invest in the latest model.
Despite this however, Cook appeared optimistic about the company’s future, noting that categories outside of the iPhone, including Mac, iPad wearables and services, actually grew by 19%.