Apple briefly became the world's first trillion-dollar public company in 2018, before a disappointing set of results in its fourth quarter caused its share price to begin a steady decline.
In a letter to investors on Wednesday, chief executive Tim Cook said the firm's sales problems were primarily in its Greater China region, which includes Hong Kong and Taiwan and accounts for nearly 20 percent of its revenue.
The sharp reaction puts Apple on track for its biggest one-day share price drop in five years and helped trigger a broader sell-off in U.S. shares as investors fretted about the state of the Chinese market and the broader outlook for the global economy.
The stock has fallen about 30 per cent since Cook first said in a November earnings call that the company might experience lower sales over the Christmas period.
Apple's first instance of revised earnings guidance since 2002 has the potential to rattle the financial markets as it puts the spotlight on China's woes and the dependence of the largest USA companies on strong growth in the world's second-largest economy. On the positive side of things, Cook is reporting increased sales in a few avenues of note, namely in services, accessories, and in the sale of wearable tech like smart-watches and iPatches, to name but a few of the new gidgets littering the market with the Apple logo.
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Apple, which has been growing in China even though it lacks a dominant position, is pressured by tariffs and other trade issues, further inflamed by the arrest of China-based Huawei's chief financial officer in Canada at the behest of the United States.
Munster and Thompson said it would take "a new product category", or large acquisition to allow Apple to regain its momentum.
"That is having an impact on earnings and it's not going to be just Apple", he said.
Some analysts said Apple erred in boosting the price of its new iPhones to well over $1,000 in a global smartphone market that is largely saturated and facing tougher competition. The flagship of the 2018 lineup, the iPhone XS Max, starts at $1,099-compared to the $769 starting price of the 2016 flagship, the iPhone 7 Plus. STMicroelectronics, which makes imaging sensors for the new iPhone, dropped 9.2 percent, Business Insider reported.
Patrick Moorhead of Moor Insights & Strategy said Apple may be unable to deliver the double-digit growth than many on Wall Street have been expecting given the current smartphone market.