Almost 12 years ago, Steve Jobs stepped on stage at MacWorld and unveiled iPhone as “revolutionary and magical product”.
The iPhone survived and thrived despite the 2008 financial crisis and a long list cheaper smartphone alternatives and copycat. The known Apple has to become the most valuable company in the world.
However, iPhone appears to lost its magic. In a rare move for Apple (AAPL), CEO Tim Cook warned investors in a letter that the company expects lower sales for the holiday quarter due to weaker iPhone sales.
Cook said, the shortfall primary came from China which is grappling with a softening economy and an ongoing trade war with the United States. Analysts were quick to note Apple’s iPhone problem is probably about more than just China.
It was also said in his letter that, Cook didn’t mention prices hikes. Instead he said, that there are other factors hurting iPhones sales outside China. Fewer carrier subsides and the company’s decision to offer cheaper battery replacement last year are just some of the factors written in the his letter.
Cook’s letter serves as a stark reminder of the company’s new normal: If you want to believe in Apple now, its n longer because iPhones sales but, despite it.
For some investors it’s a rude awakening news. About 9% of Apple stock fell overnight, pushing the company’s market value down below Microsoft, Amazon and Alphabet.
Daniel Ives, an analysts with Wedbush, wrote in an investor note “In the modern iPhone era last night was clearly Apple’s darkest day in our opinion and presents a challenging growth period ahead for the company”.
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