Apple plunges most in nearly six years on IPhone slump

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US stocks fell sharply on Thursday after yesterday's surprise revenue forecast downgrade from Apple CEO Tim Cook.

People buy latest iPhone while others try out its latest model at an Apple Store in Beijing, Tuesday, Dec. 11, 2018.

President Donald Trump said he isn't concerned that Apple Inc. has warned sales will fall short of expectations because of the trade war with China, an announcement that provoked a sell-off in the USA stock market.

US equities just had their worst December since 1931 as concerns including the U.S.

Shares of US-based suppliers and chipmakers including Cirrus Logic Inc, Skyworks Solutions Inc, Analog Devices, Broadcom Inc, NXP Semiconductors NV and Micron Technology Inc were all down in morning trading. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses. He didn't mention that Apple had priced its new models at stratospheric levels.

Some analysts said Apple erred in boosting the price of its new iPhones to well over $1,000 in a global smartphone market that is largely saturated and facing tougher competition.

Apple said China sales came in lower than expected in the quarter ending December 29 when it revised its revenue estimate downward. "We believe the economic environment in China has been further impacted by rising trade tensions with the United States".

Factors impacting iPhone sales include "consumers adapting to a world with fewer carrier subsidies, United States dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements", Cook wrote.

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Later in the missive, however, Steve Jobs former right-hand man would admit that the iPhone has also fallen short of expectations, both in its emerging and established markets around the world.

The rare revenue warning - the company's first in almost 12 years - sent shockwaves through global financial markets with chipmakers that supply to Apple being the hardest hit.

After multinational companies relied heavily on China for years for growth, warning signs across different industries are beginning to crop up suggesting there are broad, ominous trends gathering force in the world's second largest economy.

Apple's top-of-the-line iPhones have a starting price of $1,000 (£800).

A weak report Thursday on USA manufacturing also weighed on the market.

Another question mark for Apple is its 5G strategy in China, where the USA firm is not expected to have a 5G-enabled phone until 2020, behind rivals like Huawei, Xiaomi Corp and Samsung Electronics. Germany's DAX dropped 1.5 percent and the French CAC 40 fell 1.7 percent, and Britain's FTSE 100 gave up 0.6 percent. Stocks in Asia closed with small losses. A higher VIX typically corresponds with declining stock prices.

Apple shares were down 9.8 percent at $142.40. Services generated $10.8 billion in revenue for the quarter - a 27 percent increase from a year earlier. Copper, which is used in construction and wiring, fell 2.1 percent to $2.57 a pound.

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