Apple stocks have tumbled, after the company revealed its iPhone sales have been slowing because of economic weakness in China, sending shockwaves through global markets.
In a letter to shareholders, Apple chief executive Tim Cook said that the company’s biggest drop in sales came from the Greater China region, which the BBC says 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,” Cook said.
Shares fell as much as 8% when trading resumed, which “wiped up to $55 billion off of the company’s stock market value”, CNN says.
Cook pointed at the rising trade tensions between the US and China as another reason for the expected drop in earnings, from around $93 billion to $84 billion, for the final quarter of 2018.
News of the drop in sales comes amid reports that some Chinese companies and organisations are calling for workers to boycott products made in the United States or by American companies.
Organisations across China “have issued notices urging staff members to show their support for Huawei,” CNN says, “threatening punishment against anyone caught with Apple products or even offering subsidies to buy Chinese smartphones”.