Apple saw nine percent wiped off its value in early trading on Wall Street after admitting in its first revenue warning to investors since 2002 that it was being badly affected by weaker growth. Tim Cook, said falling sales of iPhone, iPads and computers were primarily due to the “magnitude of the economic deceleration, particularly in greater China”. But in a conversation with CNBC, Paul Meeks of Wireless Fund said: “I think that Apple’s problems are much more serious and more Apple-specific than macroeconomic.
“If I were to roughly calibrate it, I would say thirty percent macroeconomic -China, US tariffs and trade war – and seventy percent Apple-specific.
“So I believe that CEO Tim Cook’s remarks last night, as far as the underpinnings to lower revenue guidance, were a bit disingenuous.”
When asked to describe the ‘Apple’specific’ problems, Mr Meeks responded: “First of all, the smartphone market is maturing.
“It’s very much like the PC market as we went from the ‘80s and the ‘90s into the internet era of the 2000s.”
His host elaborated: “When you say that do you feel that the old model where everybody felt eager and compelled to upgrade every two years has passed?”
Mr Meeks replied: “Yes, I believe that we’ll stretch out these upgrade cycles and we know that at some point there will be a pushback on price.
“We know that the iPhone, at least last quarter, had zero growth with units year to year.
“And so going forward, all the growth must come from continued increases in average selling price.
“At some point, unless that phone is also going to polish your shoes, particularly in the emerging markets where folks aren’t that wealthy, you can’t charge over a grand for a cellphone.”
Robin Li, chief executive of Baidu, the Chinese search engine, echoed Cook’s warning, reportedly writing in a letter to staff that “winter is coming”.