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Apple blames weak iPhone China sales as it cuts revenue forecast | News

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US tech giant Apple has taken the rare step of slashing its quarterly sales forecast, acknowledging that demand for iPhones is slowing and confirming investor concerns that its most profitable product has lost some of its consumer appeal amid competition from cheaper rivals.

In a letter to shareholders, Chief Executive Officer Tim Cook said Apple’s revenue for the October-December quarter – including the crucial holiday shopping season – will drop well below the company’s earlier projections and those of analysts.

Apple now expects revenue of $84bn for the period, below analysts’ estimate of $91.5bn, according to IBES data from Refinitiv. Apple originally forecast revenue of between $89bn and $93bn. The official results are scheduled to be released on January 29.

The news sent Apple shares tumbling 7.7 percent in after-hours trade, triggering a broader selloff in the stock market and dragging the company’s market value below $700bn.

Cook traced most of the revenue drop to China, where the economy has been slowing and Apple has faced tougher competition from smartphone makers such as Huawei and Xiaomi. US President Donald Trump has also raised fresh tensions between Washington and Beijing by imposing tariffs on more than $200bn in goods, although so far the iPhone has not been affected directly.

China’s “economy began to slow there for the second half”, Cook said during an interview with CNBC on Wednesday afternoon. “The trade tensions between the United States and China put additional pressure on their economy.”

In his letter, Cook, who became Apple’s CEO in 2011, Cook said the company anticipated challenges in key emerging markets but “did not foresee the magnitude of the economic deceleration, particularly in Greater China”.

“In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” he wrote.

Cook also acknowledged that consumers in other markets are not buying as many of the latest iPhones, released last autumn, as Apple had anticipated – a factor that could stem from a starting price of $1,000 for Apple’s top-of-the-line iPhones.






The economic toll of China-US trade war

“What Apple would like to do, as much as possible, is to cite China and the trade war as the cause of this – but over the last couple of years Apple has significantly increased the price of the iPhone,” Shaun Nichols, technology reporter at The Register, a tech news and opinion website, told Al Jazeera.

“Tim Cook’s official explanation for this a kind of a combination – the trade war is causing problems in China, worries over the economy and that’s making people less likely to go and purchase Apple products.”

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Cook’s comments on the impact of the US trade tensions with China “might be a dig at Trump, but mostly he may be using the trade turmoil as an excuse for some missteps they’ve made over the last year”.

Analysts say Apple must now try to find a way to win back Wall Street’s confidence and reverse a steep decline that has erased $350bn in shareholder wealth in just three months.

“This is Apple’s darkest day during the Cook era,” Wedbush Securities analyst Daniel Ives said. “No one expected China to just fall off a cliff like this.”

While Trump’s trade war with China is not helping Apple and other US technology companies, Ives believes Apple’s price miscalculation created an opening for rivals with less costly alternatives that still worked well.

The price gap is one reason Huawei surpassed Apple in smartphone sales from April through September last year to seize the number two spot behind industry leader Samsung, according to the research firm International Data Corp.





Apple’s board of directors named Tim Cook as the company’s chief executive officer in 2011 [File: Marcio Jose Sanchez/The Associated Press]

Premium pricing strategy

Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.

Apple’s move was not entirely a surprise, however.






COUNTING THE COST: The big tech lash – Tech giants under scrutiny

In November, the Cupertino, California-based company said it would stop disclosing unit sales data for iPhones and other hardware items, leading many analysts to worry that a drop in iPhone sales was coming. And after several component makers in November forecast weaker-than-expected sales, some market watchers called the peak for iPhones in several key markets.

In November, Cook cited slowing growth in emerging markets such as Brazil, India and Russia for a lower-than-anticipated sales estimates for the company’s fiscal first quarter. But Cook specifically said he “would not put China in that category” of countries with troubled growth.

That all came before the damage to the Chinese economy from trade tensions with the US and long-simmering structural issues became evident.

Apple is now the highest-profile multinational corporation to warn that the economic slowdown in China could hurt its business. Automakers such as Ford Motor Co, Hyundai Motor Co and Nissan Motor Co all previously said they planned to cut production in the country.

But Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy.

“The question for investors will be the extent to which Apple’s aggressive pricing has exacerbated this situation and what this means for the company’s longer-term pricing power within its iPhone franchise,” James Cordwell, an analyst at Atlantic Equities, told Reuters news agency.

In the latest fiscal year, ended on September 29, unit sales of the iPhone were essentially flat from the prior year, while iPhone revenue expanded 18 percent to $166.7bn. That growth came entirely from higher prices.

But some investors were heartened by Apple’s plans on using its cash pile.

In his letter, Cook said Apple has $130bn in net cash and that it intends to continue its efforts to reduce that cash balance to net zero, which the company has so far accomplished through dividend increases and share buybacks.

“We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices,” said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners.

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Tiger-Cats claim victory against the Argos to maintain home record on Labour Day

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The Hamilton Tiger-Cats were at their devastating best against the Toronto Argonauts when the two locked horns on Labour Day at the Tim Hortons Field.

Just like with previous Labour Day fixtures, the Ticats produced a stellar performance with Dane Evans throwing two touchdown passes while Frankie Williams scored on a 67-yard punt return as they claimed a 32-19 victory on Monday. With this vital win, the Ticats extended their Labour Day home record to 7-0.

For players and fans of the Tiger-Cats, games on Labour Day are a lot more special and losing is something the Ticats aren’t used to.

“We know the fans are going to be behind us, we know Toronto is going to be chippy, we know it’s going to be sunny; we know it’s going to be windy. Everything that happened (Monday) we prepared for. There is something extremely special about Tim Hortons Field on Labour Day . . . you can feel it in the air, I can’t put it into words,” said Evans.

After the COVID-19 induced hiatus, the CFL is back in full action and fans can now bet on their favourite teams and just like with online slots Canada, real money can be won. Hamilton (2-2) recorded its second straight win to move into a tie atop the CFL East Division standings with Montreal Alouettes (2-2). Also, the Ticats lead the overall Labour Day series with Toronto 36-13-1.

In the sun-drenched gathering of 15,000—the maximum allowed under Ontario government COVID-19 protocols—the fans loved every minute of this feisty game. After all, this was the Ticats first home game in 659 days, since their 36-16 East Division final win over Edmonton in November 2019.

The contest between the Ticats and Argos was certainly not bereft of emotions, typical of a Labour Day fixture, as it ended with an on-field melee. But the Argos often found themselves on the wrong end of the decisions with several penalty calls and most of the game’s explosive plays.

Hamilton quarterback Evans completed 21-of-29 passing for 248 yards and the two touchdowns while Toronto’s make-shift quarterback Arbuckle completed 18-of-32 attempts for 207 yards. Arbuckle also made a touchdown and two interceptions before eventually being substituted by McLeod Bethel-Thompson.

Bethel-Thompson made an eight-yard TD pass to wide receiver Eric Rogers late in the final quarter of the game.

“They got after us a bit . . . we didn’t block, or pass protect well,” said Ryan Dinwiddie, rookie head coach of the Argos in a post-match interview. “They just kicked our butts; we’ve got to come back and be a better team next week.”

The Labour Day contest was the first of four fixtures this year between Toronto and Hamilton. The two teams would face off again on Friday at BMO Field. Afterwards, the Tim Hortons Field will play host to the Argonauts again on Oct. 11 with the regular-season finale scheduled for Nov. 12 in Toronto.

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Roughriders looking to bounce back after Labor Day defeat

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In what an unusual feeling for the Saskatchewan Roughriders, they would now need to dust themselves up after a 23-8 loss to the Winnipeg Blue Bombers in what was a Labor Day Classic showdown in front of a full capacity crowd at Mosaic stadium.

Craig Dickenson, head coach of the Riders, witnessed his team with an unbeaten record get utterly dominated by a more superior team from Winnipeg. Now, he has got a lot of work on his hands getting his team back to winning ways as they visit the Banjo Bowl next.

“We’re going to see what we’re made of now…the jury’s out,” said Dickenson.

Dan Clark, who played centre for the Riders expressed his disappointment in losing what was “the biggest game of the year”.

 “If you lose every other game, you don’t want to lose that one. We’ve just got to take the next step,” said Clark in a report. “There are 12 steps to the Grey Cup left and it’s just about taking that next step and focusing on what Saturday will bring.”

With their first defeat to Winnipeg, the Riders (3-1) now rank second place in the CFL’s West Division, trailing the Bombers by one victory (4-1). However, the Riders will have the chance to even the season series during their trip to Winnipeg this Saturday. With the CFL heating up, fans can now enjoy online sports betting Canada as they look forward to their team’s victory.

The Rider’s offensive line will once again have a busy time dealing with the Blue Bombers’ defence.

Quarterback Cody Fajardo, who played one of the best games of his career two weeks earlier, had quite a stinker against the Bombers in the Labour Day Classic—which is the most anticipated game for Rider fans.

Fajardo had a 59 per cent completion percentage which wasn’t quite indicative of what the actual figure was considering he was at 50 per cent before going on a late drive in the final quarter with the Bombers already becoming laid back just to protect the win.

Fajardo also registered a personal worst when he threw three interceptions, but in all fairness, he was always swarmed by the Bomber’s defence.

While Fajardo has claimed responsibility for the loss and letting his teammates down, many would be curious to see how the team fares in their next game and with less than a week of preparation.

Dickenson is confident that his team would improve during their rematch in the 17th edition of the Banjo Bowl in Winnipeg. The only challenge now would be the loss of home advantage and dealing with the noisy home crowd, he added.

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Canadian report reveals spike in food-related litter during pandemic

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TORONTO — Restaurants’ inability to offer their usual dine-in service during much of 2020 may explain why an unusually high amount of food-related litter was found across the country, a new report says.

The Great Canadian Shoreline Cleanup (GCSC) is an annual program in which volunteers are encouraged to clean up green spaces and other natural areas.

Last year, single-use food and beverage containers made up 26.6 per cent of waste collected through the program – nearly twice as high a percentage as in 2019, before the pandemic.

“We suspect the change may be one of the many implications of COVID-19, including more people ordering restaurant takeaway and consuming more individually packaged foods,” GCSC spokesperson Julia Wakeling said in a press release.

While food- and beverage-related litter accounted for a greater percentage of waste uncovered by GCSC than in the past, it wasn’t the single largest category of items picked up through the program last year.

That dubious honour goes to cigarette butts and other smoking-related paraphernalia, which comprised nearly 29 per cent of all items collected. There were more than 83,000 cigarette butts among the 42,000 kilograms of waste found and clean up last year.

So-called “tiny trash” – little pieces of plastic and foam – also accounted for a sizeable share of the waste, making up 26.8 per cent of the total haul.

In addition to smoking-related items and tiny trash, the main pieces of litter removed by GCSC volunteers last year included nearly 22,000 food wrappers, more than 17,500 pieces of paper, more than 13,000 bottle caps and more than 10,000 beverage cans.

Discarded face masks and other forms of personal protective equipment were also detected and cleaned up, although not tallied in their own category.  PPE waste has been repeatedly cited as a concern by environmental advocates during the pandemic; a robin in Chilliwack, B.C. is the earliest known example of an animal that died due to coronavirus-related litter.

The GCSC is an annual program organized by Ocean Wise and the World Wildlife Fund Canada. Its operations were disrupted by the pandemic as well; only 15,000 volunteers took part in the program last year, versus 85,000 in 2019, due to delays and public health restrictions making large group clean-ups impossible.

Still, there was GCSC participation from every province and the Northwest Territories in 2020. Nearly half of the volunteers who took part were based in B.C., where the program began in 1994.

Data from past GCSC reports was used as part of the research backing Canada’s ban on certain single-use plastic items, which is scheduled to take effect by the end of 2021.

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