By Pascal Oparada
On Wednesday, Apple CEO, Tim Cook, issued a letter revising the company’s Q1 projections for 2019.
Revenue has shifted from initial projection of between $89 billion and and $93billion to $84 billion for first quarter of this year.
The reason is largely hinged on the fact that one of its flagship products, the iPhone, is not getting the much needed patronage as envisaged by the tech giant.
Customers had complained of ‘very expensive’ iPhone. The newest ones sell for between $749 (N263, 000) for iPhone XR to $999 (N360,000) for iPhone XS.
Although has Cook pinned the lower revenue projections on a number of factors, including “challenges in emerging markets” and “economic deceleration, particularly in Greater China,” as well as factors like “US dollar strength-related price increases” and customers choosing to replace their existing iPhone batteries instead of buying new iPhones, the underpinning factors have remained that customers are not keen on new iPhones due to its high cost.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook says in the letter. “In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Cook said in the letter.
He said, “As we exit a challenging quarter we are as confident as ever in the fundamental strength of our business. We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity, and to emerge better as a result.”
Analysts believe the downturn is not unexpected and advised investors not to panic.
“The company is growing its services and ‘other’ categories, just not enough to drive overall revenue growth,” Patrick Morehead told TechCrunch. “I am not concerned for the company, but its likely investors will not see the company value it was at until it can see a likely path to double-digit revenue growth.”