Apple shares slumped in after-hours trading – driven by disappointing iPhone sales in China and a warning that future revenues will fall well short of expectations on Wall Street.
The gloomy market reaction overshadowed an otherwise strong financial performance in Apple’s first fiscal quarter.
In the three months to 30 December, the tech giant reported sales of $120bn (£94bn) and profit per share of $2.18 (£1.71) – comfortably beating targets set by analysts.
However, Apple’s chief financial officer has warned that revenue in this current quarter will be at least £5bn (£3.9bn) less than the same period a year ago.
Sales of iPhones in China – a key market – are in sharp focus, as they were $3bn (£2.35bn) less than what analysts had anticipated.
The latest results will fuel concerns that Apple is losing ground here, with consumers switching to foldable smartphones and devices made by local rival Huawei.
In an interview with Reuters, Apple CEO Tim Cook admitted that China is the most competitive smartphone market in the world.
IDC analyst Nabila Popal said: “In China, Apple is facing more competitive challenges not only because of Huawei but also because of foldables, which is a very popular and fast-growing segment in China – and as we all know, Apple does not have a foldable device – yet.”