Apple announced last night it could be $9 billion short of the expected revenue for the first fiscal year of 2019. The announcement led to a huge backlash, with Apple’s share price continuing to decline throughout the day.
Apple is, obviously, in damage control mode after last night’s announcement. Bloomberg obtained an email sent by Tim Cook to Apple employees where Cook outlined some of Apple’s successes over the recent period.
Cook stated that iPhone activations on Christmas Day hit a new record in the United States and Canada. That’s a pretty massive accomplishment, but Cook didn’t share much of the metrics, so it’s unclear whether the new record for iPhone activations was fueled by sales of new iPhones like the iPhone XS and iPhone XR, or whether it was because of sales of older models.
“We expect to set all-time revenue records in key markets including the US, Canada and Mexico, Western European countries including Germany and Italy, and countries across the Asia-Pacific region like Korea and Vietnam. Our worldwide installed base of active devices also hit a new all-time high, reflecting the loyalty of our customers and their appreciation for the work you do,” Cook said in the memo.
Apple today published a press release boasting the success of its App Store over the holidays, too. App Store brought in $1.22 billion in revenue over the holidays, according to Apple. More importantly, the App Store brought in $322 million alone on New Year’s Day 2019, setting a new single-day record for the store.
“The App Store had a record-breaking holiday week and New Year’s Day. The holiday week was our biggest week ever with more than $1.22 billion spent on apps and games, and New Year’s Day set a new single-day record at more than $322 million,” said Phil Schiller, Apple’s senior vice president of Worldwide Marketing.
Apple continues to boast about the growth in revenue from its Services business, which obviously includes the App Store, Apple Music, etc. The company is still blaming the shortfall in revenue on the Greater China economy, where the sales of its products apparently slowed down due to economic conditions. And considering there have been rumours about low iPhone XR sales, that may not be completely accurate.
Apple is trying its best to hit back here, and I’m guessing we will see some more announcements next week.