Apple Stock Tumbles as it cuts Forecast due to China's Economic Slowdown
Apple CEO Tim Cook (Photo Credit: Business Insider)

Apple’s stock has fallen sharply after it announced that it was correcting its projected revenue forecast for the October-December period on the back of slowing demand in China.

China is a huge market for Apple, making up about 15% of its revenues globally and its slowing economy is having a direct impact on Apple’s earnings. China’s growth rate in 2018 is set to be the weakest since 1990, impacting the iPhone maker’s sales during the holiday season.

Apple announced that it anticipated its revenue of about $84 billion for the three months to 29 December. This was a $5 billion drop from its November forecast which had predicted revenues of $ 89 billion. Apple's share price sank more than 7% after this announcement which takes its losses to a more than 28% slide since November.

In a letter to investors on Wednesday, Apple’s chief executive Tim Cook said the firm's sales problems were primarily in its Greater China region, which includes Hong Kong and Taiwan and accounts for almost 20% of its revenue. "While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," he said. This statement wiped up to $55 billion off of the company's stock market value.

This statement comes close on the heels of Apple’s announcement that it will no longer disclose the number of iPhones sold each quarter.

The ongoing trade war with the United States, as well as other factors like the company offering cheaper iPhone battery replacements has also contributed to lower sales figures for the smart-phone maker.

The iPhone has been Apple's main revenue-earner for years, accounting for nearly 60% of Apple's total sales in the three months ending in September. Wednesday's cut to the sales forecast is the first time Apple has revised its guidance to investors in more than 15 years.