Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates

[MacRumors]

Though iPhone revenue was up in 4Q 2018, fourth quarter iPhone XS and XS Max sales were not as strong as expected, and iPhone sales growth was essentially flat. Apple sold 46.9 million iPhones during the quarter, compared to 46.7 million in the year-ago quarter, missing analyst estimates.

Apple's $89 to $93 billion revenue forecast for the first fiscal quarter of 2019 is rather also cautious, which Apple blamed on foreign exchange costs, issues with supply/demand balance, and weakness in emerging markets.

"Virtually every foreign currency has depreciated against the dollar over the last 12 months," said Apple CFO Luca Maestri. "That adds 200 basis points of headwinds to the tune of $2 billion to our revenue."

Uncertainty in emerging markets is also a factor. "There's some level of uncertainty at the macroeconomic model in some emerging countries where consumer confidence is not as high," said Maestri.

Maestri also said that Apple has launched an "unprecedented number" of new products over the course of the last six weeks, and Apple has "some uncertainty" around supply/demand balance for some of these products. The launch timing of the new iPhones is also a factor, with the iPhone XR coming later than the XS and the XS Max. This had an effect on Apple's Q4 revenue and will also impact Q1.

Despite the cautious guidance for the first fiscal quarter of 2018, Apple is "very excited" about its lineup of products and services entering the holiday shopping season, and Maestri said that Apple has the "strongest lineup" it's ever had.

Going forward, Apple does not plan to break down unit sales of the iPhone, iPad, and Mac, a major change to the way that earnings data is presented. Apple will, however, continue to provide details on overall iPhone, iPad, and Mac revenue.

Apple CEO Tim Cook and Apple CFO Luca Maestri explained during today's earnings call that Apple does not believe that providing unit sales is relevant for the company at this point.

Article Link: Apple Blames Currency Fluctuations and Uncertainty in Emerging Countries for Weak Holiday Sales Estimates

 

[Ampidire]

Just below image, Luca is listed as CEO, but later he is listed (correctly) as CFO.

 

[ipponrg]

Blaming? I thought Apple knew what people didn't know.

 

[Brandhouse]

Maybe they should look in their own backyard and ask if they've overpriced the phones to over glory?

 

[stu.h]

I bought an iPhone XS Max yesterday, surely the should skew the results?

 

[TechGod]

Really Apple? Weak sales aren't to do with your ridiculous pricing?

 

[jclo]

Just below image, Luca is listed as CEO, but later he is listed (correctly) as CFO.

I fixed it, apologies for the typo there.

 

[joelhinch]

said Apple CEO Luca Maestri

Well, Tim Cook haters. You got your wish it seems.

 

[rwilliams]

All of the main products (iPhone, iPad Pro, Apple Watch, MacBook Air) going up in price this year has nothing to do with this.

 

[JPack]

Another flat quarter for India. But another excuse this time.

Tim is bullish but that doesn't change whether consumers can afford the iPhone there.

 

[2GoldFish]

Non-US Apple customer: "Apple, how come new products are getting more expensive?"
Apple: "To counter FX fluctuations"
Non-US Apple customer: "That seems fair, here, take my money!"

 

[Mydel]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

 

[TechGod]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

It really has gone up way too much.

 

[rmoliv]

There will come a time when overpricing products won’t be enough to keep revenue going up and offset the decrease in sold units... I think they deserve it. Greed is never good.

 

[MrGuder]

No people are not upgrading their phones like they use to plain and simple. Phones are way over priced and people are wising up before forking over that kind of money.

 

[Techwatcher]

Really Apple? Weak sales aren't to do with your ridiculous pricing?

Right? lol

 

[goobot]

I think it’s the yearly price hikes.

 

[Marshall73]

There will come a time when overpricing products won’t be enough to keep revenue going up and offset the decrease in sold units... I think they deserve it. Greed is never good.

A valid point...if the sales were decreasing.

 

[mi7chy]

Prices are still too low for flagship iPhone. Just round it up to $2000 starting minus one penny so it looks like a bargain at $1999.

 

[Martius]

I think that Apple revenue peaked this year. Apple gained some momentum in recent years and the hype is still here, but the insane prices are gonna slow the sales. If you look at current product line, there is not a single new product that is really worth it's price. I don't say those are not good products, I like the new iPads, MBA, iPhones, but we went from premium prices to extra-premium prices. MBA should start at $999 (retina displays are here for like 6 years, touchid for like 4 years), iPad Pro at $649 (FaceID is cheaper now, displays are nice but nothing exceptional), MBP at $1299 etc. I can't remember when was the last time Apple released new tech and kept the prices at the same level. Of course, in 2008 MBA was quite expensive, but they were lowering the price every year and making in faster every year. They should have done it with 12" Macbook, but they didn’t. I'm really curious how this will turn out. My collegues (designers, developers) are getting quite suprised how much it will cost for them to upgrade their Apple stuff.

 

[smaffei]

I never complained too much about apple pricing as I clearly saw value in their product. but now even I have to say that I am reluctant to pay the premium for their lineup. I feel like price/value ratio increased to the point that it is not worth the asking price any more. And that come from person with significant disposable income and fully submerged in Apple ecosystem...

"submerged" as in drowning in the Apple ecosystem. Now, that sounds more like it.

 

[Baymowe335]

Weak?

$93B in sales is weak? They guided for $84-87B last quarter and beat it with $88B, so if they beat $93B with $95-96B, that will be a huge number.

They are literally guiding for 6% higher sales than last year, so mathematically, this article is wrong.

Lol...I’m buying more shares.

 

[Rogifan]

Amazing how $93B in revenues from ONE company for ONE quarter can be considered weak. How many Fortune 500 or 100 companies don’t even do $93B of sales in ONE YEAR?

 

[Baymowe335]

I think that Apple revenue peaked this year. Apple gained some momentum in recent years and the hype is still here, but the insane prices are gonna slow the sales. If you look at current product line, there is not a single new product that is really worth it's price. I don't say those are not good products, I like the new iPads, MBA, iPhones, but we went from premium prices to extra-premium prices. MBA should start at $999 (retina displays are here for like 6 years, touchid for like 4 years), iPad Pro at $649 (FaceID is cheaper now, displays are nice but nothing exceptional), MBP at $1299 etc. I can't remember when was the last time Apple released new tech and kept the prices at the same level. Of course, in 2008 MBA was quite expensive, but they were lowering the price every year and making in faster every year. They should have done it with 12" Macbook, but they didn’t. I'm really curious how this will turn out. My collegues (designers, developers) are getting quite suprised how much it will cost for them to upgrade their Apple stuff.

They are guiding for a 5% revenue increase over last year.

 

[2GoldFish]

Really Apple? Weak sales aren't to do with your ridiculous pricing?

And then when they launch a product, they say "this is the most affordable XYZ yet"...

 

[Quu]

I always buy a new iPhone every 24 months but I've skipped the iPhone XS. It just costs too much, simple as that. Maybe I'll switch to upgrading every 36 or 48 months. If the iPhone XS Plus was £819 I would have bought one day one simple as that.