Apple spooks market with profit warning

When compared to the estimates provided by Apple to its investors in November, the revenue amount took a drastic nosedive, while the "other income/(expense)" category went through the roof, reaching approximately $550 million from an initial estimate of $300 million.

"In fact, most of our revenue shortfall to our guidance, and over 100 per cent of our year-over-year worldwide revenue decline occurred in Greater China across iPhone, Mac and iPad", Cook said.

It is rare to hear that iPhone buyers prefer to replace their battery rather than upgrade to a new iPhone, which of course also suggests the converse - that Apple has been benefitting from the throttling of older iPhones and the high cost of replacing their batteries to drive sales. "The government-reported GDP growth during the September quarter was the second lowest in the last 25 years", said Cook in a letter to Apple shareholders.

CEO Tim Cook made the announcement after were market closed.

Apple's plan to improve results, he said, consists of making it simpler to trade in a phone at Apple Stores, finance phone purchases over time, and get help transferring data from a current phone to a new phone, among other things.

As Hassett spoke to Poppy Harlow on CNN, he was asked about how the Dow is down by more than 500 points today after Apple's shares dropped by 9% amid a weak sales forecast.

China's economy grew at its weakest pace since the financial crisis last quarter as its trade war with the United States added uncertainty to an already rocky environment.

In addition, the holiday quarter was big for Apple's wearables business.

Hassett argued that a softer economy in China is cutting into USA companies' sales there and that the economic pain gives Trump leverage in ongoing trade negotiations. Apple's stock was down almost 9 percent.

But Cook also listed this among the factors: "Some customers taking advantage of significantly reduced pricing for iPhone battery replacements".

On January 2, Tim Cook, the CEO of Apple, wrote in a letter to the investors of the company that the firm's projected revenue is expected to be lower than its initial expectation. It didn't have the latest and greatest specs to satisfy the hardcore Apple fanboy, but at $750, it is still a fairly expensive upgrade for consumers used to that baseline $650 for a new iPhone.

Apple's tech peers saw modest declines in a down market but not on the same scale as the Apple sell off. Netflix was just barely into green territory.

Financial markets have started the new year in much the same rocky way as they ended 2018.