1227 Tuesday 29 January 2019

Apple will be reporting this evening after the market closes, and given their recent lowering in revenue projections, what should we expect to see? And will today’s FaceTime glitch throw a curveball into the market reaction throughout trading today?

Given some of the doom and gloom that has come out of Apple recently, it can be hard to remember that they held a $1 trillion market cap back in August, especially as it now sits at $739bn. There are several factors that affected the stock value since then, some of which are perhaps out of their hands.

Earlier this month CEO Tim Cook cited a drop in revenue in China for their lowering of expectations. Not only did they note a lack of upgrades compared to previous years, this is also a global trend, but they also saw many of their models blocked for sale within the territory. The ban of sales stems from a dispute with chipmaker Qualcomm, an argument upheld by Chinese courts, but it has been speculated that Apple and Chinese phone maker Huawei as being used as pawns in the US – China trade wars. Again, this is speculation.

One of the other possible negatives that may be seen in tonight’s report is the global slowdown in sales of new handsets. As mentioned previously, there is an increasing trend of users not upgrading their handsets with each new model and this is likely to hit Apple hard as the majority of their profits come from iPhone units.

To make things even more intriguing about the report is the fact that they have been hit by one of their biggest security breaches on its eve. It was revealed this morning that a glitch in the FaceTime app has allowed people to eavesdrop on both the mic and the camera with the company currently scrambling to fix the bug as soon as possible.

Given the upcoming report and the bug in the system, trading during today’s US session will almost be as interesting as when the figures are revealed after the bell.

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