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Tim Cook Blames These Internal Factors for Apple’s Guidance Cut

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Jan. 3 2019, Updated 9:40 a.m. ET

Apple

In the previous part of this series, we looked at how Apple (AAPL) gave its investors an unpleasant surprise on the first trading day of 2019. The company cut its guidance, especially its revenue outlook, for the quarter ended December 29. Now, let’s move on by looking at the key internal factors CEO Tim Cook blamed for the mess that forced the company to revise its guidance.

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Key internal factors

In Apple’s January 2 press release, Cook noted several internal and external factors that are affecting its sales in some emerging markets, especially in China. He blamed factors such as the timing of new iPhone launches and the ramp-up of many other new Apple products.

On the macro side, Cook reiterated that the US dollar’s strength against other major currencies is likely to reduce the company’s revenue growth by about 2% year-over-year. Note that continued strength in the US dollar could also have a negative impact on international market revenue and profitability of other major US companies including Amazon (AMZN), Netflix (NFLX), Alphabet (GOOG), and Microsoft (MSFT).

In the last couple of months, many notable Wall Street research firms have cut their outlook on Apple due to reports about its weakening iPhone sales.

On October 30, Apple unveiled its new iPad Pro and a range of Mac computers including the new MacBook Air with edge-to-edge retina display and a new Mac mini. While the company’s new MacBook Air has an impressive configuration, it largely received mixed reviews. In the near term, after Apple’s admission of iPhone sales troubles in some emerging markets could keep investors on their toes.

Read on to the next part where we’ll discuss what other key macro factors Apple blamed for revising its guidance downward.

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