As the US markets opened today, the shares of Apple Inc, plunged by more than five percent. It caused the Californian company to settle below its $1 trillion valuation as the investors responded to its forecast of a slump this Christmas season.
Yesterday, the tech giant warned its shareholders that the festive sales could drop below the expectations, even as it recorded a double-digit improvement for the fifth consecutive quarter.
The revenue outlook of the iPhone maker for the rest of the year stood between $89 billion (£68.4 billion) and $93 billion. The numbers were against expected revenue that amounted to $92.8 billion as assessed by the S&P Global Market Intelligence.
Meanwhile Tim Cook, the chief executive of Apple, disclosed that the tech titan will stop reporting the unit sales for its iPads, iPhones, and its other products.
Michael Hewson, the chief analyst of CMC Markets, said that the decision suggests that the company feels that the market may have hit “peak iPhone.” It also said that the company will be unlikely to achieve its previous unit numbers.
Hewson stated: “Judging by the sales numbers that does seem likely but when your average selling price rises to $793 a unit, due to the launch of higher spec and thus higher priced products, who really cares?”
The shares of Hewson said were down to $209.20. It was down from the $232 that was recorded at the start of last month, even after Cook reassured its investors that the popularity of Apple in China continued to be strong, in the face of a strong trade war between the United States of America and China..
Cook blamed the weaker Christmas forecast of Apple on foreign exchange rates, the decreasing demand in emerging markets and the concern that Apple would not be able to produce enough of its new products in order to sufficiently meet the demands of the market.
However, Hewson noted a “rather twisted sense of priorities” as the analysts expect that the company will bring in revenue amounting to $90 billion next quarter, however, it will also obsess over unit numbers instead of product prices.
Hewson stated: “Apple management are probably more concerned that a higher unit sale price might prompt accusations that the company is taken its customers for granted by continually ramping up prices.”