Apple has lowered its revenue guidance for Q1 to US$84 billion, down from the earlier projection of between US$89 billion and US$93 billion.
In a letter to investors, Apple CEO Tim Cook attributed this to the timing of the iPhone launches, strong US dollar, unprecedented number of new products, and economic weakness in some emerging markets.
“In addition, these and other factors resulted in fewer iPhone upgrades than we had anticipated,” he said.
The muted upgrade demand is unsurprising with the soaring prices of its newest iPhones — the iPhone XR, iPhone XS and iPhone XS Max — with prices ranging from S$1,229 to S$2,349.
Based on the new price points, some have dubbed that the “ultra premium category”. But, the prices are really insane, taking the smartphones right into the business notebook segment.
Even the entry level price of S$1,229 is more expensive than many high-end Android alternatives.
Apple will continue to appeal to its die-hard fans but even have baulked at the cost of keeping up.
Cook pinpointed Greater China’s softening economic conditions as a key contributing factor to the downward revenue adjustment.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” he said.