Apple’s late iPhone launch temporarily pulled $ 100 billion off its stock value

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Apple fell more than 5% at one point in over-the-counter trading, removing $ 100 billion from its market value.

The late launch of new 5G phones caused Apple Inc. customers to postpone buying new devices, and on Thursday caused the company to see its largest quarterly drop in iPhone sales in two years.

Apple fell more than 5% at one point in over-the-counter trading, removing $ 100 billion from its market value.

Since 2013, Apple has been delivering new iPhones like clockwork every September. However, delays caused by pandemics have postponed the announcement by a month as some devices haven’t shipped yet.

Although booming Mac and AirPods sales increased total sales and profits above analysts’ expectations, iPhone sales fell 20.7% to $ 26.4 billion. (Graphic: https://tmsnrt.rs/3ecmgCG)

Investors expected lower sales of the best-selling product Cupertino, California, but backing was worse than expected, particularly in China, where more consumers have access to 5G than in the US or Europe.

Apple has largely exceeded sales expectations this year, releasing a range of new products and services that its customers have largely embraced during the pandemic.

According to Refinitiv’s IBES data, revenue and earnings for the fourth quarter ended September 26th were $ 64.7 billion and 73 cents per share, compared to analyst estimates of $ 63.7 billion, respectively 70 cents per share.

However, the announcement of the iPhone 12 flagship was delayed until October 13th, a few weeks later than usual, meaning the fourth quarter results do not include iPhone sales on the opening weekend.

In an interview with Reuters, Apple CEO Tim Cook said he was “optimistic” about the iPhone 12 cycle based on the first five days of shipping data.

“5G is a once in a lifetime opportunity. And we couldn’t be more excited to hit the market right then,” said Cook. “At least in the US, the airlines are very aggressive.”

At the time the iPhone 12 was released, sales in Greater China fell 28.5% to $ 7.95 billion. Cook said he expected the new 5G devices will help iPhone sales rebound in China.

“What we see in the first five days at the beginning gives us great confidence that China will return to growth in our first quarter,” Cook told Reuters.

Apple didn’t provide a revenue growth forecast, but CFO Luca Maestri said revenue from services and non-iPhone products would increase by double-digit percentages in the first quarter of the fiscal year, in line with analysts’ expectations. He said iPhone revenue would rise too, implying the rate would be in the single digits. According to Refinitiv data, analysts expect iPhone sales to rise 6.45% to $ 59.56 billion in the first quarter.

Logan Purk, an analyst at Edward Jones, said, “While iPhone sales will grow this cycle, it will be disappointing compared to increased expectations as we don’t believe the 5G is a compelling reason for a surge of upgrades . “

Apple has offset volatile iPhone sales in recent years with steady growth in its service segment, which includes streaming music and television. Services revenue rose 16.3% to $ 14.5 billion, compared to analyst estimates of $ 14 billion. Cook told Reuters that Apple One, a package of Apple’s paid services, will be launched on Friday.

Cook told Reuters that Apple has 585 million paying subscribers on its platforms, up from 550 million in the previous quarter and closer to the 600 million subscriber target the company set for the end of the 2020 calendar.

Apple’s shares have risen sharply in the past two years as its revenue streams diversified to reduce reliance on the iPhone. Thursday’s stock crash raises the question of whether Apple is even more dependent on iPhone sales than some investors had hoped.

“Apple needs to be able to sustain the upgrade cycle or the stock price will fluctuate as the current valuation leaves no real room for forgiveness,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

According to Apple, sales in the accessories segment rose 20.8% to $ 7.9 billion, compared to analyst estimates which, according to Refinitiv data, rose 13.5% to $ 7.4 billion. Mac and iPad sales rose to $ 9.0 billion and $ 6.8 billion, respectively, according to Refinitiv. Compared to estimates of $ 7.92 billion and $ 6.12 billion.

(This story was not edited by GossipMantri staff and is automatically generated from a syndicated feed.)

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