Apple just did something that rarely happens. It warned investors of weaker than expected sales.
Stock in the company was halted after 4 p.m. when CEO Tim Cook released a letter to Apple investors detailing a slowdown in sales for the first quarter mainly from its newly released iPhone XR, XS and XS Max models.
Shares in Apple were down over $11 in after-hours trading Wednesday. In 2018, Apple broke the $1 trillion level in market capitalization but those days seem long ago. Apple shares are now down more than 35% from its 52-week high last October. In its fourth-quarter earnings report on November 1, Apple said it would no longer report unit sales for the iPhone which helped trigger the company’s stock selloff over the last two months.
In his investor letter, Cook blamed supply constraints for the sales slowdown of the iPhone. Sales of Apple Watch Series 4 and iPad Pro were also constrained much or all of the quarter. AirPods and MacBook Air were also constrained Cook says.
Cook said China was the main culprit in worldwide revenue shortfall among the iMac, iPhone and iPad. Trade tensions between the two countries are also affecting sales.
Apple’s sales slowdown isn’t really a surprise since reports of weaker iPhone sales among suppliers have been widespread over the past two months.