Tim Cook in a statement to Apple investors:
Today we are revising our guidance for Apple’s fiscal 2019 first quarter, which ended on December 29… Based on these estimates, our revenue will be lower than our original guidance for the quarter.
I can’t remember Apple doing this recently. It means Apple is missing its previous revenue guidance of between $89 and $93 billion—down to $84 billion, which is a miss that’s $5 billion below the lowest end of its previous guidance. That’s a big miss. It means Apple will be down $4 billion from the year-ago holiday quarter.
At the core of the shortfall, apparently, are “fewer iPhone upgrades than we had anticipated.” Apple also blames issues in the slowing Chinese economy and changes to the phone subsidization model.
But there’s no doubt that this is going to be, as Cook writes, a “challenging quarter,” and the fact that it missed guidance means that it’s also one that took Apple by surprise. That’s not a great look. While Cook’s statement points out that the other portions of Apple’s business seem to be doing great—“revenue outside of our iPhone business grew by almost 19 percent year-over-year”—the fact is, the iPhone makes up nearly two-thirds of Apple’s business. When the iPhone is hurting, so is Apple.