Tim Cook Says iPhone Activations Set New Christmas Day Records in United States and Canada

In a memo to employees obtained by Bloomberg's Mark Gurman, Apple CEO Tim Cook provided additional commentary about the company's reduced revenue forecast for the first quarter of its 2019 fiscal year.

2018 iphone trio
Cook said Apple is "disappointed" that its quarterly revenue will fall up to $9 billion short of its initial guidance, entirely due to the iPhone, but touted revenue records from other product categories including the Mac, services like the App Store and iCloud, and wearables like the Apple Watch and AirPods.

iPhone activations also set new Christmas Day records in the United States and Canada, according to Cook.

In a letter to shareholders on Wednesday, Apple disclosed that its revenue will be lower than its original guidance for the first quarter of its 2019 fiscal year, coming in at approximately $84 billion. Apple originally guided for revenue of $89 billion to $93 billion in the quarter on November 1.

The letter said lower than anticipated iPhone revenue, primarily in Greater China, accounts for the entire shortfall.

In his memo, Cook said "this moment gives us an opportunity to learn and to take action," starting with an all-hands meeting with employees today at 9:30 a.m. Pacific Time at Apple's Town Hall auditorium on its Infinite Loop campus.

The full memo:

Team,

Happy New Year — I hope everyone was able to rest and enjoy time with loved ones over the holidays.

This afternoon we issued a letter to Apple investors explaining that we are revising our financial guidance for the holiday quarter. I encourage you to read it. As you will see, our revenue shortfall in Q1 is from iPhone, primarily in Greater China.

While we are disappointed to be falling short of our quarterly revenue goal, our fiscal first quarter was also a record setter for revenue from Services, Wearables and the Mac. iPad revenue grew double-digits over the year-ago quarter, and iPhone activations in the U.S. and Canada set new Christmas Day records. 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.

We are tremendously proud of the innovations we're delivering to our customers with iPhone XR, iPhone XS and iPhone XS Max. These are, without a doubt, the best iPhones we've ever made. We did not set a new record for iPhone sales in Q1, however, due to a number of factors — some macroeconomic, and some specific to Apple and the smartphone industry.

External forces may push us around a bit, but we are not going to use them as an excuse. Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple's mission — delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger.

With that in mind, please join me for an all-hands meeting on Thursday morning at 9:30 a.m. PT. Be sure to check AppleWeb for more details. Due to construction at Apple Park, we'll be gathering at Town Hall on the Infinite Loop campus. Join us there in person, or via live stream through AppleWeb. I'll have more details about the quarter, and I'm looking forward to your thoughts and questions.

Hope to see you there.

Tim

AAPL shares are currently down around eight percent to $145 in pre-market trading following the disappointing news.

Related Forum: iPhone

Popular Stories

Apple Vision Pro 2 Feature 2

Apple Reportedly Suspends Work on Vision Pro 2

Tuesday June 18, 2024 8:17 am PDT by
Apple has suspended work on the second-generation Vision Pro headset to singularly focus on a cheaper model, The Information reports. Apple was widely believed to have plans to divide its Vision product line into two models, with one "Pro" model and one lower-cost standard model. The company is said to have been deprioritizing the next Vision Pro headset over the past year, gradually...
Apple WWDC24 Apple Intelligence hero 240610

Apple Explains iPhone 15 Pro Requirement for Apple Intelligence

Wednesday June 19, 2024 4:48 am PDT by
With iOS 18, iPadOS 18, and macOS Sequoia, Apple is introducing a new personalized AI experience called Apple Intelligence that uses on-device, generative large-language models to enhance the user experience across iPhone, iPad, and Mac. These new AI features require Apple's latest iPhone 15 Pro and iPhone 15 Pro Max models to work, while only Macs and iPads with M1 or later chips will...
2022 back to school apple feature

Apple's 2024 Back to School Sale Launching This Week

Monday June 17, 2024 12:27 pm PDT by
Apple will launch its annual Back to School promotion for university students in the United States and Canada this week, according to Bloomberg's Mark Gurman. Apple's back to school sales provide students with a free Apple gift card when purchasing a Mac or an iPad, and this year's promotion could help Apple push the new M2 iPad Air and M4 iPad Pro models. Last year, Apple offered U.S....
apple watch series 9 display

Kuo: Apple Watch Series 10 to Get Larger Screen and Thinner Design

Monday June 17, 2024 1:20 am PDT by
This year's Apple Watch Series 10 will be thinner and come in larger screen sizes than previous models, according to Apple analyst Ming-Chi Kuo. In his latest industry note -10-and-98075c44ce92">shared on Medium, Kuo said the screen size options on the next-generation Apple Watch will increase from 41mm to 45mm, and from 45mm to 49mm, while being encased in a thinner design. For reference,...
M4 Real Feature Red

M4 MacBook Pro Models Expected to Launch in Late 2024

Tuesday June 18, 2024 10:50 am PDT by
MacBook Pro models with an M4 chip are expected to launch in the fourth quarter of 2024, according to display analyst Ross Young. In a tweet for subscribers, Young said that panel shipments for new 14-inch and 16-inch MacBook Pro models are set to begin in the third quarter of 2024, which suggests a launch toward the end of the year. Apple started its M4 chip refresh in May with the launch...
Apple Pay Later feature 1

Apple Discontinuing Apple Pay Later

Monday June 17, 2024 11:44 am PDT by
Apple is discontinuing Apple Pay Later, the buy now, pay later feature that it just launched last October. Apple Pay Later is being discontinued as of today, but people who have existing Apple Pay Later loans will be able to continue to pay them off and manage them through the Wallet app. Apple announced plans to end the feature in a statement provided to 9to5Mac, which also notes that...
watchOS 11 Thumb 2 1

watchOS 11 Supports Automatic Nap Detection

Monday June 17, 2024 4:05 pm PDT by
watchOS 11 appears to include a new feature that allows an Apple Watch to automatically detect and record when you're taking a nap. As shared on Reddit, an Apple Watch owner took a nap and was able to see the sleep data recorded in the Health app, despite not putting the device in Sleep Mode. Right now, the Apple Watch only tracks and records sleep when it is in Sleep Mode, and there is no...
iPod Nano vs iPod Pro Ad Feature 1

Apple Developing Thinner MacBook Pro, Apple Watch, and iPhone

Monday June 17, 2024 2:22 am PDT by
Apple intends to slim down the MacBook Pro, Apple Watch, and iPhone, with the new ultra-thin M4 iPad Pro a sign of the company's new design trajectory, according to Bloomberg's Mark Gurman. When the M4 iPad Pro was unveiled last month, Apple touted it as the company's thinnest product ever, and even compared it to the 2012 iPod nano to emphasize its slim dimensions. Writing in the latest ...

Top Rated Comments

AnthonyG6 Avatar
71 months ago
Drop your prices Apple!
Score: 20 Votes (Like | Disagree)
weckart Avatar
71 months ago
Why should they?

The margins on iPhone are far smaller than most Android devices. Additionally, the price is the price. Don't like it don't buy it.
I believe you spelt larger incorrectly.
Score: 20 Votes (Like | Disagree)
Infinite Vortex Avatar
71 months ago
I'm still finding it hard to buy the "its all China" storyline. China represents approximately 25% of Apple's revenues and for 25% of your revenues to result in a 7% miss on total revenues you'd need far more than "weakness" in sales to be going on, rather, a total decimation of sales. That on top of "record activations" in North America?! Keep in mind that those record activations didn't come from the Xs/Xs Max but for the cheaper iPhone 7 & 8.

I think there's way more that's not being said than is being said.
Score: 9 Votes (Like | Disagree)
A MacBook lover Avatar
71 months ago
Apple has made the best phone every year since 2007. Haters will deny.

The whole smartphone industry follows Apple like a lost child. Apple’s loss here isn’t anyone’s gain.
Score: 8 Votes (Like | Disagree)
unplugme71 Avatar
71 months ago
Why should they?

The margins on iPhone are far smaller than most Android devices. Additionally, the price is the price. Don't like it don't buy it.
That’s the point. Not everyone IS buying it at that price. Apple is now seeing that - especially in other markets
Score: 7 Votes (Like | Disagree)
ChrisMoBro Avatar
71 months ago
Why should they?

The margins on iPhone are far smaller than most Android devices. Additionally, the price is the price. Don't like it don't buy it.
Wow, this is a load of BS. Apple has huge margins on all their products, far higher than most companies.

For no reason whatsoever, other than to counter falling sales, Apple bumped the prices on most of their products. Just look at the cost of the Apple Pencil or the Mac Mini.
Score: 7 Votes (Like | Disagree)