Apple Stock Loses $55 billion on China Slowdown
/CNN/ Apple has a big China problem, and it's making investors very nervous.
Apple (AAPL) warned investors to expect lower sales from the holiday quarter due primarily to "lower than anticipated" iPhone sales in China amid an ongoing trade war with the United States, as well as other factors like the company offering cheaper iPhone battery replacements, according to a letter from CEO Tim Cook on Wednesday.
After decades of expansion, the Chinese economy is slowing down. Growth in 2018 is set to be the weakest since 1990. And 2019 looks even worse. The world's second largest economy, China is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.
China is a huge market for Apple, making up about 15% of its revenues globally.
"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook wrote in the letter. He pointed in part to "rising trade tensions" with the United States.
Apple now expects revenue for the three months ending in December to be about billion, down from an earlier estimated range of between billion and billion.
The iPhone has been Apple's chief moneymaker for years, accounting for nearly 60% of Apple's total sales in the three months ending in September.
The company's shares were briefly halted after hours before Cook's letter was made public, and fell as much as 8% when trading resumed. That wiped up to billion off of the company's stock market value.
While Cook focused on the impact of China, he did note in the letter that the number of people upgrading to new iPhones was "not as strong" as the company had...