Apple warns weakness in emerging markets could hamper sales, shares sink

Apple unveiled the new iPhone 8 iPhone 8S and iPhone X at its launch event in California last year

Apple unveiled the new iPhone 8 iPhone 8S and iPhone X at its launch event in California last year

The firm sold 46.9 million iPhones in the quarter to end-September, a modest rise on the 46.7 million sold for the same period previous year.

Despite record revenue results, Apple shares fell sharply by 7% over the news of the slow growth in iPhone shipments globally including India.

On the call with analysts, Apple CEO Tim Cook tried to explain the decision to do away with unit sales figures by way of a grocery store analogy.

Cook said that Apple has had productive discussions with the Indian government on the issue of setting up stores in the country. The nearly $10 billion revenue is another record figure for the category and is expected to increase more as Apple pours in more efforts in offerings such as digital content and payments. After all, the company has often managed to generate high revenues even with a small number of device sales. As per Counterpoint data, Apple is believed to be on course to sell around 2 million iPhones in India in 2018. Analysts were looking for 48.4 million iPhone units in the quarter, and an average selling price of US$729.

But one problem Apple investors will face is not knowing what the margin mix is within the services business. A simple calculation shows that on average, each iPhone sold brought Apple $793 in revenue.

But it was Apple's future guidance that spooked investors.

Apple investors have been increasingly focused on growth in the company's services business as growth in the global market for smartphones levels off in terms of unit sales.

Apple has announced that, as of next quarter, it will no longer report unit sales figures for iPhones, iPads and Macs.

In contrast, Apple's services business, which includes Apple Music and iTunes, continues to grow, with revenue up 17% on this time a year ago to just under 10 billion dollars (£7.6 billion).

Apple's quarterly financial calls are heavily anticipated by many, as the trillion dollar company doesn't just disclose revenue, but also shares how many iPhones, iPads, Macs, and other devices it sold.

"There's going to be a minimum tax on foreign earnings coming from the new tax legislation" passed in the United States, Apple Chief Financial Officer Luca Maestri told Reuters. Reuters reports that Apple shares have fallen by six percent following the release of the earnings report, knocking $67 billion off the company's total value.

In an unprecedented move, Apple has chose to stop revealing the sales figure of iPhone from the first quarter of fiscal 2019. Its services arm, for example, which includes iCloud and Apple Music subscriptions, had a turnover of close to $10bn in the period.

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