Apple is the new Nokia

A Chinese man uses his mobile phone outside an Apple Store in Beijing China Dec. 12 2018

Apple is the new Nokia

The firm had revenue of $62.90 billion during the quarter, compared to analysts' expectations of $61.55 billion.

Apple shares plummeted almost 10 percent on the news Thursday, with the company shedding some 38 percent since its valuation hit $1 trillion past year. "And so a lot of Chinese consumers in a show of patriotism are saying let's not buy Apple let's buy Huawei and show support for the Chinese state".

Apple is the target of nationalist sentiment over the arrest of Huawei's chief financial officer in Canada at the behest of the USA on alleged Iran sanctions violations.

US shares fell after Apple CEO Tim Cook told shareholders after markets closed Wednesday that Chinese iPhone sales were slipping.

Trump said Apple has gone up "hundreds of percent" since he's been president, but added that he wants the company to make its iPhone and other products in the US.

Suppliers in Europe and Asia slumped on the news.

The rare revenue warnings from Apple suggested weaker-than-anticipated sales of iPhones and other gadgetry, in part because of trade frictions between Washington and Beijing.

"They're trying to aim at a very fine target", said Dollar, a former World Bank and U.S. Treasury Department official.

Apple's stock price hovered around the $143-$144 mark in the first few minutes of trading, down about 9% from Wednesday's closing price of $157.92. "Beyond China, we don't see strong evidence of a consumer slowdown heading into 2019, but we just flag to investors that we believe Apple's replacement rates are likely much more sensitive to the macro now that the company is approaching maximum market penetration for the iPhone".

CLSA estimates the iPhone's ASP is set to increase by at least 7% versus a year ago, to $US852.

Still, the market seemed to be caught off guard. "We have underestimated the strength of the economic downturn, especially in China", wrote Tim Cook.

Some analysts, however, questioned the impact of Apple's own actions, such as its unyielding pursuit of high selling prices for its products.

Cook's letter rattled investors, with analysts calling it a "bombshell". The iPhone X launched in November 2017, while the iPhone XS and XS Max were released in September. The new forecast from Apple expects revenue to be as low as $84 billion, blaming China but also the slowing number of iPhone upgrades in other countries. "China is the biggest beneficiary of Apple. because they build their product mostly in China".

President Donald Trump downplayed Apple's recent announcement that revenue was weaker than expected for the holiday quarter.

"Some investors will consider the stock broken. but we've followed the company long enough to know there is cyclicality in the market's relationship with Apple". "Futures immediately sold off. Apple is a 4 per cent position in the market and considered a bellwether and comments were that the USA was fine, China was slower than expected".

Cook also cited the trade war between the United States and China as another factor.

"In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad", Cook said in the letter.

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