PALO ALTO, Calif. (KTVU) - Apple shares plunged more than seven percent in after-hours trading Wednesday, after the tech giant announced disappointing iPhone sales over the holiday season.
In a letter to investors Wednesday, CEO Tim Cook said revenue for the current quarter was forecasted at $84. It was projected to come in around $90 billion.
Apple’s chief wrote, “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China.”
Cook went on to say the economic environment in China was further impacted by rising trade tensions with the United States.
“I think the president's trade war with China causes a lot of uncertainty,” said Tech Expert Larry Magid of ConnectSafely.org. “It spooks investors and it spooks consumers.”
Magid also points to the availability of cheaper replacement batteries and the saturated smartphone market.
“Everybody pretty much who wants a smartphone has a smartphone,” said Magid. “The goal is to convince them last year's phone isn't good enough and that's getting harder because last year's phones are good enough. Apple in some ways is a victim of its own success.”
Not one person KTVU ran into at the Apple store in Palo Alto was buying Apple's latest top of the line iPhone XS.
“It’s crazy,” said Bruce Knoblock of Palo Alto. “I think they are super expensive. I think the cheapest one we were looking at was $450.”
“I’m not terribly surprised because there's not been a lot of innovation recently. It's the same phone, just more expensive,” said Michaela Lassig of Palo Alto.
Lassig said a smartphone that's waterproof would impress her.
"Something I haven't seen before, something that would make my life easier instead of making it more expensive,” said Lassig.
“Apple has to diversify and come up with killer products other than the iPhone,” said Magid.
However, the popularity of Apple remains. It was evident in the crowd of customers at the Palo Alto store. Many of them who've bought into the Apple eco-system.
“It’s my primary computing device outside of work so it's kind of an essential tool,” said Jeff Weitzman of Palo Alto.
“We are an iPhone family. all of our home computers are Apple, iPads, lots of phones,” said Knoblock.
Magid said investors should not be worried since Apple is a strong company and it will continue to do well but not at the rate it has grown before unless it comes up with innovative new products, perhaps in the television or car categories.