Apple shares pounded after CEO Tim Cook admits disappointing sales of iPhone in China

    1 of 1 2 of 1

      The market capitalization of Apple has fallen from more than US$1 trillion to US$680 billion in just over two months.

      And today, the stock is down more than nine percent after CEO Tim Cook wrote a frank letter about the difficulties his corporation is experiencing in the Far East.

      "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook stated in a letter to investors. "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."

      He noted that the Chinese economy began to decline in the second half of 2018, with government-reported gross domestic product at the lowest increase in 25 years.

      "We believe the economic environment in China has been further impacted by rising trade tensions with the United States," Cook added. "As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed. And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp."

      He also included this upbeat comment: "Despite these challenges, we believe that our business in China has a bright future. The iOS developer community in China is among the most innovative, creative and vibrant in the world. Our products enjoy a strong following among customers, with a very high level of engagement and satisfaction. Our results in China include a new record for Services revenue, and our installed base of devices grew over the last year. We are proud to participate in the Chinese marketplace." 

      As of this writing, Apple shares are trading at US$142.95. That's down from a 52-week high of US$233.47.

      The Dow Jones Industrial Average, which is an index of 30 large-cap stocks, is off 2.44 percent.