The world’s two biggest economies are likely to record respectable rates of expansion.
The biggest of all, the US, had two very strong quarters in the middle of the year. Data for the final three months will come at the end of January, and while they might well show some slowing down, the whole year is likely to register pretty strong expansion of close to 3%.
As for China, the slowdown after three decades of stunning growth continues. But it’s still likely to be about 6.6% in 2018, which is more than enough to generate significant improvements in average living standards.
Most mainstream forecasts suggest that the recovery after the great recession will continue for another year and more.
So what about the clouds?
Growth in the US is likely to be slower. The surge in 2018 reflected President Trump’s tax cuts. There is some debate about whether the impact will last. Is it a one-off effect that will fade like a sugar rush, or will it have a lasting impact on incentives to work and invest?
There is also the impact of the central bank, the Federal Reserve, to consider. Will it continue raising interest rates to keep inflation close to its 2% target following the four such moves it made in 2018?
The mainstream view among economists is that keeping that away from the centre of the political arena is better for the long-term control of inflation.
There is another strand to President Trump’s economic policy that could undermine economic growth: international trade.
The US is already well into a major trade confrontation with China over what President Trump calls the theft by China of the technology of American companies doing business there.
Three months into the year, the tariffs that his administration has already imposed on a wide array of Chinese goods are due to increase from 10% to 25%. China can be expected to retaliate as it did to the first round of tariffs.
It is true that Presidents Trump and Xi have held some talks and it is possible that the escalation will be averted. But it is certainly not assured.
And then there are the US tariffs on steel and aluminium, ostensibly imposed to protect national security, which have affected a large number of US trade partners.
The prospect of continued trade tensions is a significant cloud over the economic outlook.
Europe also has its own problems. The economic data for the third quarter of the year showed a marked slowdown in growth in the eurozone.
Some of this may be a very short-term stumble due to new procedures for testing vehicle emissions, which have disrupted the motor industry. But it could be the start of a more significant loss of momentum in a recovery that was never particularly strong.
Europe also has its own trade issue to worry about: Brexit. The UK is due to leave the EU on 29 March. There is a wide range of possible outcomes, some of which could disrupt trade between the UK and the continent.
That said, there are economists who think the US may be heading for a recession, not this year but in 2020. Nouriel Roubini, who foresaw the financial crisis, is one. He also warns that the recession he predicts will be harder for the government and Federal Reserve to deal with.
Relatively few properties were put on the market in the UK in the last year. Even fewer featured their own library, music room and orangery.
This estate in Cheshire does. It is dominated by a six-bedroom house but also has its own leisure suite, three cottages, and even a separate shower and cloakroom for the gardener.
It sold for close to £6m, having been one of the most-viewed residences on internet property portal Rightmove last year.
Such glamorous mansions are beyond the reach of most people, but affordability has been a key feature in UK housing in the last year, even at much lower price points.
So, with few buyers searching for properties, particularly in big cities, and not many owners putting up For Sale signs outside their homes, the UK housing market in 2018 was regularly described as “subdued”.
Even when a sale had been agreed, deals were “taking longer to get over the line”, according to Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors (Rics).
A recent survey by the Centre for Economics and Business Research (CEBR) suggested homes in cities and major towns were on the market for 102 days on average before being sold or put under offer – that was six days longer than in 2017.
The expectation among commentators is that there will be more of the same in 2019. The market will keep moving, but slowly.
Properties will go on the market, partly the result of death, debt and divorce. People will still have to move for work or for schools, or because they are attracted by a discount.
Potential buyers might struggle to get a new mortgage, owing to strict lending criteria, and potential movers might choose to renovate or extend their homes instead of relocating.
All of those factors, and more, mean most of the commentators we asked are predicting relatively little change in house prices in 2019.
“In short, the market will continue to tread water,” said Andrew Burrell, of Capital Economics.
Experts’ 2019 UK house price predictions
Richard Donnell, property market analysts Hometrack: 3% rise
Andrew Montlake, mortgage broker Coreco: 1% to 2% rise
Henry Pryor, housing market commentator: 5% fall
Miles Shipside, property portal Rightmove: no change
Andrew Burrell, Capital Economics: 1% rise
Simon Rubinsohn, Royal Institution of Chartered Surveyors: no change
Russell Galley, mortgage lender the Halifax: 2% to 4% rise
These predictions show an average for UK house prices, but each of the commentators point out that the picture can vary significantly in different parts of the country. It can also vary in different neighbourhoods of the same town.
“Trying to sum up the health of the UK’s 27 million homes is impossible,” admits housing commentator Henry Pryor.
Richard Donnell, research and insight director at Hometrack, says: “There are pockets where local economies are weak and this is acting as a drag on house prices.”
Mr Burrell, of Capital Economics, says that prices in London could drop by 5% next year, but rise elsewhere.
At a hyper-local level, the performance of a school or the prevalence of crime, can affect prices.
At a national and international level, there is one major issue that could have a huge impact on the housing market.
In its most recent monthly survey, Rics suggests that there was an unprecedented dominance in the commentary of surveyors about one single issue: Brexit.
“Uncertainty created by the Brexit process is causing buyers and sellers to sit tight in increasing numbers,” it says.
The Bank of England says the impact of the UK leaving the EU on the housing market could be significant. Its scenarios illustrate what could happen, not necessarily what is most likely to happen, as a result of Brexit.
House prices could fall by up to 30% from their pre-Brexit level if there was no deal, or a so-called “disorderly Brexit”, the Bank says. That compares with a peak-to-trough drop of 17% in average UK property values as a result of the financial crisis 10 years ago.
“It is worth stressing that this modelling from the Bank was undertaken for financial stability purposes. Some of the assumptions behind the disorderly Brexit scenario seem implausible to us,” Mr Rubinsohn, of RICS, says.
If the UK’s exit is “disruptive”, then the Bank says the fall in property prices could be up to 14%.
It is clearly tough to predict the outcome of Brexit, so the effect it might have is even more difficult.
Mr Pryor says the transition phase of Brexit will simply add to uncertainty. “If you think that the housing market foundations are shaky now then I suspect we ain’t seen anything yet,” he says.
Andrew Montlake, from mortgage broker Coreco, says some certainty over an EU-UK deal could mean a steady outlook for the housing market.
“Whichever way Brexit goes, the UK is still a stable country compared to many others and an end to all the current uncertainty will make a huge difference,” he says.
“There is also potentially something to be said for buyers to have property investments outside the EU which could then go through a particularly bumpy time.”
The last year has been as difficult as ever for many young people wanting to buy a property, owing to strict lending controls, issues with affordability, and a lack of secure employment. However, that story has been one primarily heard in the big cities, and particularly in London.
In fact, first-time buyers were still the most active group in the UK property market in the last year, according to Hometrack. Government Help to Buy schemes have helped more than one in 10 of them to buy newly built homes in particular.
In contrast, existing homeowners with mortgages saw little reason to move. Sales among this group were at their lowest level for a decade. Owners took the safety-first approach by deciding not to move and take on a bigger mortgage but to stay put, take advantage of historically low home loan rates and reduce their overall level of debt.
In normal circumstances, with the Bank expecting interest rates to rise only in small increments, the same might be expected in the coming year.
But the political situation is not normal and that makes predicting the UK housing market particularly tough. The commentators we spoke to a year ago were generally accurate in predicting house prices in 2018. They may not have the same confidence in their expectations this time around.
– Amount of the United Kingdom that has housing you can afford
Range of affordable areas includes:Armagh City, Banbridge and Craigavon and Belfast
No affordable areas
Search the UK for more details about a local area
You have a big enough deposit and your monthly payments are high enough. The prices are based on the local market. If there are 100 properties of the right size in an area and they are placed in price order with the cheapest first, the “low-end” of the market will be the 25th property, “mid-priced” is the 50th and “high-end” will be the 75th.
Very rarely does an early technology garner such an air of inevitability like AR has in the past few years.
2018 was supposed to be a year where the foundational tech for augmented reality was built out a bit and the industry took a couple big leaps. Things started off well-enough but momentum really doesn’t seem be on the side of some of the industry’s heaviest hitters heading into 2019, suggesting that life for earlier stage startups may not be much easier.
There are plenty of reasons to be long-term bullish on AR, but the time horizons some have espoused seems to be bogus and pitch decks organized around a near-term spike in phone-based or glasses-based users are going to have a tougher time being taken seriously in 2019.
The ghost with the most
For all of the AR advances made this year, the company most emblematic story of AR’s numerous challenges was clearly Magic Leap .
The company spent the past few years trashing industry standards and lauding their own approaches with braggadocio but ended up releasing a product that largely iterated on its competitors. With the release of their “developer kit” this year, a product that clearly seems to have stopped being a first-gen product only when the reality of the climate availed itself, the startup seems to be finding that optics and infra progress is going to come more slowly than foretold.
I’ve talked to more than a few people who think Magic Leap hindered progress in the AR industry by siphoning investor attention and discouraging other hardware startups from joining the fray in the face of a billions-backed unknown. But in 2019, there are fewer available plays for the funding juggernaut. They spent years trying to distinguish themselves from the corporate mission of Microsoft and their HoloLens headset, now it seems they’ve begun to see that the only hopes of justifying their sitting valuation in the next few years is enlisting support from the big customers that MSFT is chasing, as opposed to single-handedly birthing a consumer market. Magic Leap recently lost a bid to Microsoft for a $480 million military contract to outfit troops with AR headsets, and as Microsoft prepares to release a second-generation HoloLens with the enterprise in full concentration, it seems like Magic Leap is going to reshuffle its deck.
Dead-on-arrival content plays
Magic Leap’s struggles are well-documented but what plagues the overall AR industry seems less discussed.
The consumer appetite for phone-based AR content is obviously lacking. Even Apple’s reality distortion field isn’t enough to convince people that its ARKit releases have led to anything other than some weird experimentation for iOS users. Few Android OEMs are boasting about compatibility with Google’s ARCore platform anymore, suggesting that approachable hardware standards for device makers wasn’t all that was missing from the failed Tango brand.
The most apparent mobile AR opportunities are probably in user-generated content, but there seems to be a disconnect between platforms and users in terms of how complex these AR experiences can and should become. At this point, selfie masks still seem to be at the edge of users’ comfort levels, leaving a lot of solved tech problems stuck in limbo waiting for a problem that makes them worthwhile.
Niantic is probably one of the most revenue-heavy startup dabbling in phone AR, even if it is a bit of a false idol for the industry. Nobody seems to think of Niantic as a capital-A augmented reality startup, but it’s clear that team behind Pokémon Go sees the technology as a not-fully-tapped reservoir of potential for future gaming experiences that feel more social and more immersive than any mobile RPG that’s sucking up the majority of your playtime today. The company’s new Harry Potter title still doesn’t have a release date, we haven’t seen any gameplay, but we do know that AR plays a part in the title in some capacity. We’ll see if they figure out things the rest of the industry hasn’t.
Platform tech opportunities
Part of this broader content pain is the fact that some known platform fundamentals are still getting tackled. In 2018, the startups in the AR that were raising the most buzz were so-called “AR cloud” startups, teams that were largely focused on solving more fundamental back-end problems around localization and mapping. It turns out “simple” problems like getting a bunch of users in a single session or keeping tracking of objects you’ve moved around between sessions are actually incredibly complex.
A big issue is that AR fundamentally relies on a level of spatial understanding that goes far beyond grasping geometry. For all the ground that has been traversed by computer vision researchers this year, issues like segmenting environments by objects and accurately identifying them are still in the earliest stages. When you think of AR tech as a subset of vision problems, you realize that products today are being approached in a kind of bizarre manner.
Google has been making worthwhile movements in proliferating their Lens computer vision engine across new apps and devices. In a very round about way the company seems to have come to the worthwhile perspective that mapping an environment spatially doesn’t really help you that much if you can’t parse the contextual nuances of what the camera is actually looking at as well.
A lot of the AR startups in this space have raised some cash on the backs of the smartphone AR trend and the hundreds of millions of potential users, but it still seems pretty dubious whether this market has legs. Fortunately, most of these solutions have wide applicability across future industries like robotics and autonomous vehicles as well, helping computers interface with the real world through visual and geographic cues, but their utility might not be as ripe as they’d hope.
This is an area where Magic Leap could be poised to find some relatively near-term success. The startup’s top brass spent a hefty amount of time at their developer conference talking about the “Magicverse,” basically their vision for bringing localized AR layers onto geographic spaces where users with Magic Leap glasses could observe the content. Without having taken a peek at the tech they’re working with, their biggest advantage seems to rely on their partnership with AT&T which is poised to start working more seriously with 5G in 2019.
The backend still remains a much more exciting market than hardware in 2019, but there may still be some interesting movement with devices this year. I don’t trust most of the predictive data that exists surrounding headset sales so I’m not even going to reference it but suffice to say that AR headset sales aren’t going to explode anytime soon.
More conservative AR hardware
One trend that I am curious to see shake out is the more simplistic version of AR where the glasses basically just offer users a heads-up display for notifications and lightweight apps.
Companies like North and Vuzix have been talking a lot about their work here. Apple’s rumored AR glasses have been talked about for ages at this point, with 2020/2021 seeming to be the rumor mill sweet spot for a release timeframe and if that’s the case I’d bet it falls more into this design ethos than a HoloLens type device. The hardware just isn’t small enough yet but it is getting close and there could be some interesting early ground that the industry could gain by moving in more heavily on traditional wearable use cases though high component costs will be an early limiter as well.
This is probably a hardware space Snap has their eyes on; Spectacles jogged a lot of the current thinking on glasses-type wearables, but at this point, the company needs something that has wide appeal and can feed users back into its own app. The company isn’t in a position to hock something with razor-thin or non-existent margins and it doesn’t gain that much from a product that sells a few thousand units in terms of building its platform.
For the Facebooks and Apples of the world, immediate market conditions and user interest obviously hold a different weight. US investment firms with good track records spent a lot of time this year rejiggering their expectations for their first waves of investments. For the more ambitious privately-held AR startups of the world, there’s probably going to be an issue with raising capital this year as a lot of the top hardware companies have been seeking more free-flowing late stage cash from Chinese firms which have been growing harder to pin down as the trade climate worsens. This is going to be a problem for hardware companies especially.
For the most part, the BS is going to continue to get easier to parse this year.
Platform plays are going to have to dial in their their target audience a bit more than “everyone with an AR-enabled phone”; more realistic expectations are something the industry should benefit from. ARKit and ARCore are going to level-up and game engine-makers are going to get better solutions for AR content creators. Backend vision challenges are going to get solved and enable things like more seamless multi-player, but there are plenty of reasons why these tech problem solutions won’t lead to big changes in user behavior. Users failing to take off in the second year of some of these big platforms probably won’t dissuade Apple, but it definitely will dissuade some investors from continuing to bet big on the near-term future of mobile AR.
Apple had some bad news tonight. It was so bad, in fact, that it had to halt trading for a time while posting a grim report that its numbers would be lower than it had forecast at the last quarterly earnings report in November. Apple blamed faltering sales in Asia, particularly in China, for the adjustment, but I’m afraid it can lay at least part of the blame on me, too.
You see, I was part of the problem, as well. On the bright side, I finally upgraded my iPhone this week. I had been using an old iPhone 6 that was more than three years old. It had become crotchety with a bad battery life, and the recharge cable wouldn’t say stuck without some serious coaxing. The phone had to be flat on a table, and would often disconnect if I even brushed against the cord or looked at it the wrong way.
I had been thinking about upgrading for several months, but I kept putting it off because the thought of spending $1,000 for a new phone frankly irked me, and I had, after all, paid off my trusty 6 in full long ago. I was going to squeeze every bit of life out of it, dammit.
In spite of my great frustration with my old phone, it took the enticement of a $200 credit to finally get me to replace it, as I’m sure the promotion was intended to do. Just yesterday, on New Year’s Day, I headed to my closest Apple Store and I finally did right by the company.
I replaced my ancient 6, but I did something else that probably hurt Apple as part of its death by a thousand cuts. I went into the store thinking I would buy the more expensive XS, but in the end I walked out with the lower-cost XR. I looked at the two phones and I couldn’t justify spending more than $1,000 for a phone with 256 GB of storage. I wanted a phone with longer battery life and a decent display and camera, and the XR gave it to me. Yes, I could have gotten an even better phone, but in the end, the XR was good enough for me, and certainly a huge upgrade over what I had been using.
Clearly lots of people across the world had similar thoughts, and one thing led to another and, before you knew it, you had a situation on your on your hands, one that forced you to halt the trading of your stock and report the bad news. The stock price is paying the price, down more than 7 percent as I write this post.
So, sorry Apple, but it appears that there is a tipping point when it comes to the cost of a new phone. As essential as these devices have become in our lives, it’s just too hard for many consumers around the world to justify spending more than $1,000 for a new phone, and you just have to realize that.
This year, the state of Mississippi is adding “In God We Trust” to all of its standard-issue license plates.
Republican Gov. Phil Bryant announced the move in May 2018.
“I was proud to sign legislation in 2014 that added the United States National Motto, ‘In God We Trust,’ to the Mississippi State Seal,” Bryan wrote in a Twitter Post. “Today, I am equally delighted to announce that it will adorn our new Mississippi license plates.”
I was proud to sign legislation in 2014 that added the United States National Motto, “In God We Trust,” to the Mississippi State Seal. Today, I am equally delighted to announce that it will adorn our new Mississippi license plates. They will be available starting in January 2019. pic.twitter.com/VXHZ0q7Qvi
Gov. Bryant told residents to expect to see the new plates in 2019. He has kept that promise and new vehicles in Mississippi now have “In God We Trust” on them.
The decision has drawn mixed reactions.
The American Humanist Association called the plates “unconstitutional.”
“The problem, obviously, is that many individuals do not believe in a God, let alone trust in him, her, or it. Thus, to create a standard license plate that displays that phrase, with no alternative at an equal cost that avoids such a statement, unconstitutionally endorses religion.”
On the other hand, John Pritchett of the Mississippi Center for Public Policy argued it is constitutional.
“We have been misinformed and misled by generations of public policy, education, and media leaders on the so-called ‘separation of church and state.’ The concept has been so pervasive that we generally accept the idea that it is inappropriate to bring any faith-based ideas to the public square. The idea that we should separate religion — of any faith or denomination — from politics is not only false, it is virtually impossible.”
Amazon Alexa had a good year as a developer platform – at least in terms of the number of voice apps being built for Alexa, if not yet the monetization of those apps. According to new data published today by Voicebot, the number of Amazon Alexa skills in the U.S. more than doubled over 2018, while the number of skills grew by 233 percent and 152 percent in Alexa’s two other top markets, the U.K. and Germany, respectively.
Amazon began the year with 25,784 Alexa skills in the U.S., which grew to 56,750 skills by the end of 2018, said Voicebot. That represents 120 percent growth, which is down from the 266 percent growth seen the year prior – but still shows continued developer interest in the Alexa platform.
At this rate of growth, that means developers were publishing an average of around 85 skills per day in 2018.
Voicebot has its own method for tracking skill counts, so these are not Amazon’s own numbers, we should note. However, Amazon itself did say at year-end 2018 that its broader Alexa ecosystem had grown to “over 70,000” total skills across markets.
In the U.K., the number of Alexa skills rose 233 percent this year to reach 29,910 by year end. In Germany, the skill count grew by 152 percent to reach 7,869 skills. Canada had 22,873 skills as of the beginning of January 2019; Australia has 22,398; Japan has 2,364; and France has 981. (Voicebot says it hasn’t yet set up a system for counting the skills in India, Spain, Mexico or Italy at this time.)
Also of interest is that much of the skill growth occurred near year-end, ahead of the busy holiday season when Alexa devices became top sellers. In the U.S., U.K. and Germany, developers published 181, 84, and 37 skills per day, respectively, during the last two months of the year.
The firm also pointed out there is some debate over whether or not the growth in third-party skills even matters, since so many of them are virtually invisible – never discovered by end users or installed in large numbers. That’s a fair criticism, in a way, but it’s also still early days for voice-based computing. Developers who are today publishing lower-rated skills may be learning from their mistakes and figuring out what works; and they’re doing so, in large numbers, on the Alexa platform.
As to what sort of skills are actually striking a chord with consumers, Amazon itself recently shared that information.
It released a year-end list of Alexa’s “top” skills, which were selected based on a number of factors including customer reviews, engagement, innovation and more, Amazon told us.
Many of the top skills were games. And many had benefited from their association with big-name brands, or had been promoted heavily by Amazon, or both.
Among the top games were music skill Beat the Intro; Heads Up!, already a top paid iOS app from Ellen DeGeneres; National Geographic’s Geo Quiz skill; Question of the Day; Skyrim Very Special Edition; The Magic Door;Trivia Hero; World Mathematics League; Would You Rather for Family; and Volley’s roleplaying game, Yes Sire.
The non-game skills were focused on daily habits, wellness, and – not surprisingly, given Alexa’s central place in consumers’ homes – family fun.
These included kid-friendly skills like Animal Workout, Chompers, Kids Court, Lemonade Stand, and Sesame Street; plus habit and wellness skills like Chop Chop, Fitbit, Headspace, Sleepand Relaxation Sounds, Find My Phone, AnyPod, Big Sky, Make Me Smart, and TuneIn Live.
It’s interesting to note that many of these also are known app names from the mobile app ecosystem, rather than breakout hits that are unique to Alexa or smart speakers. That begs the question as to how much the voice app ecosystem will end up being just a voice-enabled clone of the App Store, versus becoming a home to a new kind of app that truly leverages voice-first design and smart speakers’ capabilities.
It may be a few years before we have that answer, but in the meantime, it seems we have a lot of voice app developers trying to figure that out by building for Alexa.
With a new year comes new challenges, new opportunities, new goals to achieve and new heights to reach. Admittedly, with new goals often comes fear. In fact, navigating through the unknown is a bit scary at times, but we must make a conscious effort to rid ourselves of fear and walk in faith.
Many people wish they could experience the next 12 months with loved ones who have passed, and we have countless reasons to celebrate our blessings.
So, we must face the new year without fear and with a heart full of gusto, and below are three reasons to do so:
1. HE WILL NOT ABANDON YOU
The New Year is full of exciting, unknown experiences, new beginnings, and memories to be made, all wonderful reasons to rejoice in the coming year.
However, I understand that the unknown is often accompanied by fear. Nevertheless, you must know and remember that He will never leave you. You may be afraid and apprehensive, but He will not abandon you, and you will never face any situation alone.
”The Lord himself goes before you and will be with you; he will never leave you nor forsake you. Do not be afraid; do not be discouraged.” – Deuteronomy 31:8
We may fear that our expectations will not be met, but breathe a sigh a relief in knowing that your wants and wishes are ultimately met through knowing Christ our Savior.
2. HE WILL PROTECT YOU
The truth is, we have no idea what lies ahead. Our year may be fantastic. Then again, we may face turmoil, or maybe a combination of both.
The point is, we have no idea what will happen in the coming days, but we must find comfort in knowing that wherever we go, God is there. You may not be able to fear God’s presence physically, but He is with you, working everything out for the greater good. There’s no need to fear, God is here, the ultimate superhero.
“But the Lord is faithful, and he will strengthen you and protect you from the evil one.” – 2 Thessalonians 3:3
3. KNOW GOD AND KNOW PEACE
Yes, Jesus protects us, and yes, He will not abandon us; however, knowing God is not about having a perfect new year let alone a perfect life.
God encourages His children to be content with what we already have. Accepting Jesus Christ into your life is the ultimate source of wealth. We may fear that our expectations will not be met, but breathe a sigh a relief in knowing that your wants and wishes are ultimately met through knowing Christ our Savior.
“What is more, I consider everything a loss because of the surpassing worth of knowing Christ my Lord, for whose sake I have lost all things. I consider them garbage, that I may gain Christ.” – Philippians 3:8
In 2018, I joyfully watched my son take his first steps, and I humbly witnessed my daughter excel in a new school in a foreign country. Then again, I also endured the passing of someone very close to our family, and I experienced a challenging, painful grieving process.
Needless to say, 2019 will inevitably hold similar peaks and valleys, yet I throw my fear to the wind, and I invite God into my heart, more than ever, because I know I can face the day as long as He is by my side.
Laci Swann is the owner of Sharp Editorial, LLC, author of the children’s book series “Sloan Saves the Day,” and a writer for Lightworkers. LightWorkers’mission is to create engaging, uplifting and inspirational content that breaks through the clutter, building a community of sharing and igniting a movement in the real world that motivates people to celebrate and share the good all around them.
Apple has warned investors about its growth in the most recent quarter, citing weaker sales in China.
In an unexpected disclosure, the iPhone maker said it expected revenue of about $84bn (£67bn) in the three months to 29 December.
That is down from its November forecast of at least $89bn – a prediction that had already disappointed investors.
The firm’s shares have already fallen more than 28% since it offered investors that November outlook.
In a letter to investors on Wednesday, chief executive Tim Cook said the firm’s miss was due primarily to its Greater China region, which 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,” he said.
“In fact, most of our revenue shortfall to our guidance, and over 100% of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.”
However, he added that developed markets saw troubles as well, as fewer customers than expected chose to upgrade to Apple’s newest, most expensive phones.
Apple shares sank more than 6% in after-hours trade on Wednesday, as the warning appeared to confirm doubts about the firm’s prospects that have gripped investors in recent months.
Production cuts by major suppliers had led to worries that the firm’s newest phones were not gaining traction among buyers.
The firm had also warned investors in November that a rising dollar and economic weakness in some overseas markets would be likely to hurt its sales in the last three months of the year.
Analysts highlighted Apple as vulnerable in the US-China trade fight, fearing that the tensions would cause Chinese buyers to sour towards US brands or might trigger new tariffs on its products, many of which are made in China.
On Wednesday, Apple said the trade tensions had contributed to an economic slowdown in China and hurt consumer sentiment.
“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” Mr Cook wrote in the letter.
He added that Apple was taking steps to make it easier for customers to trade in their phones and said other parts of the firm’s business, including services, remained strong.
“While it’s disappointing to revise our guidance, our performance in many areas showed remarkable strength in spite of these challenges,” he said.