Apple has warned investors that its revenue over the crucial festive season will be lower than expected, blaming the US-China trade war for disappointing iPhone sales.
This marks the first time that Apple has issued a warning on revenue ahead of quarterly results since the iPhone was launched in 2007.
Shares in the technology giant fell seven per cent in after-hours trading following the surprise announcement from chief executive Tim Cook.
Shares in the California-based tech giant fell 8% in after-hours trading after Mr Cook said it now expected revenues of around $84bn (£67bn) in the three months to 29 December, down from previous guidance of $89bn-$93bn.
Cook said that while Apple had expected challenges in key emerging markets, it “did not foresee the magnitude of the economic deceleration, particularly in Greater China”.
He also pointed to a lower than expected number of iPhone upgrades in some developed markets and said the tech firm had launched an initiative to make it easier to trade in handsets in stores, finance the purchase over time, and get help transferring data.
The warning, which came after trading in New York closed on Wednesday, looked likely to rattle already-volatile stock markets when they reopen on Thursday – with stock index futures pointing to Wall Street falls.
Fears over the impact of Donald Trump’s trade spat with Beijing have been among the key factors that saw the FTSE 100 and wider global markets endure their worst year in 2018 since the financial crisis.
The chief executive pointed to slowing growth in China, the world’s second-biggest economy, as the key factor.
He added: “We believe the economic environment in China has been further impacted by rising trade tensions with the United States. 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.”
Cook said that lower than anticipated iPhone sales, primarily in Greater China, accounted for all of the company’s revenue shortfall compared to previous guidance.
The new revenue expectation compares with a figure of $88bn reported in the same period last year.