12 Apr

How China Helped Make iPhones More Affordable

WRITTEN BY Ruchi Gupta

Apple’s iPhone revenue declined 15%

This month China started rolling out its tax cuts, which are aimed at stimulating growth in an economy that has been slowing down recently amid trade tensions with the United States. As a result of China lowering sales tax for businesses, Apple (AAPL) has cut prices on several of its products in the country, including the iPhone, Xinhua reported.

The economic slowdown in China was blamed for Apple’s disappointing results in the 2018 December quarter. That quarter was the first holiday quarter that Apple reported declines in both revenues and profits. Revenue from the iPhone, Apple’s main source of revenue, fell 15% YoY to $52 billion in the December quarter amid weak sales in China.

How China Helped Make iPhones More Affordable

Ready to put your morning scrolling to use? Sign up for Bagels & Stox, our witty take on the top market and investment news straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.

Besides a slowing economy, a weaker Chinese currency also makes iPhones, which are priced in dollars, more expensive for buyers in the country, which contributed to the soft demand for the iPhone in the December quarter. Apple said it would start pricing the iPhone in local currencies outside the United States to cushion its customers from price swings caused by changes in forex rates.

iPhone becomes more affordable in China

The iPhone price has dropped by more than 3.0% in China thanks to the tax cut, thereby making the product more affordable for Chinese consumers.

The iPhone business is to Apple what advertising is to the likes of Google, Baidu (BIDU), and Facebook (FB). The iPhone business contributed about 62% of Apple’s total revenue in the December quarter. The advertising business contributed 98% of revenue for Facebook, 83% of revenue for Google parent Alphabet (GOOGL), and 78% of revenue for Baidu in the December quarter. Twitter (TWTR) and Yelp (YELP) derived 87% and 96%, respectively, of their revenue from advertising in the December quarter.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.

172.31.71.127