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Apple announced that it is lowering its revenue forecast for its first fiscal quarter of 2019.
In November 2018, Apple declared that its revenue would be $89 billion to $93 billion. However, come January 2019, the company told its investors that its revenue would be down to $84 billion. Consequently, Apple’s stocks dropped from about $1 trillion to below $700 billion just minutes after the announcement to the investors was made.
Tim Cook, Apple’s CEO, cited multiple reasons for the lower revenue forecast. Cook said that the strength of the US dollar and the difficulty in selling Apple products in emerging markets were among the reasons.
In particular, Cook said that iPhone sales were weaker than anticipated. Last year, Apple confessed to deliberately slowing down the performance of older iPhones to protect aging batteries. The move received criticisms, so Apple offered a discounted battery replacement fee to appease the public. As a result, customers opted getting battery replacements instead of buying new units. This ultimately resulted in weaker sales of newer iPhones.
Despite the setbacks, Cook reassured investors that the company has a strong and loyal following. In fact, he said that in the past 12 months, the number of active Apple devices grew by over 100 million units. Additionally, other products like the AirPods and the Apple Watch enjoyed an increase in revenue.
Nonetheless, Cook still plans to address the declining iPhone sales by making it easier for customers to trade in their old phones. With this initiative, customers will be able to use their old phones as partial payment to upgrade to a newer model.