Apple has reduced its first-quarter sales forecast over the crucial Christmas trading period as boss Tim Cook said the business did not anticipate China’s “economic deceleration”.
The electricals giant said in a letter to investors that its anticipated revenue in the quarter to December 29 would be $84bn (£67bn), down from previous expectations of $89bn (£71bn) and representing a 5% decline in sales year-on-year.
This marks the retail giant’s first quarterly year-on-year sales decline since 2016 and the first time the business downgraded its guidance to investors in over 15 years.
Apple chief executive Tim Cook attributed the revenue fall to difficulties in the Greater China region, which includes Taiwan and Hong Kong and accounts for approximately a fifth of the firm’s sales.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” he said.
“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.”
Apple also attributed its quarterly sales decline to fewer customers upgrading their iPhones than anticipated, including in more mature markets.
This slowdown was compounded by sales of sister product including Apple Watches, iPads, AirPods and MacBook Airs being “constrained”.
The electricals giant said its expectations around all other factors, including gross margin, remained broadly in line with earlier guidance.
“As we exit a challenging quarter, we are as confident as ever in the fundamental strength of our business,” said Cook.
“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.”