Apple’s share price crashed 9 per cent in moments after Wall Street opened on Thursday, wiping $75bn (£59.5bn) off the company’s value.
After-hours trading had indicated a big drop in the tech giant’s shares following a surprise revenue warning on Wednesday evening. That was reflected in the official market price as Apple’s shares fell 9.07 per cent to $143.60 after the opening bell before recovering slightly to $145.05
European stocks also fell and US markets were on track for hefty losses as investors weighed up the impact of a slowdown in China, the world’s second largest economy.
Chief executive Tim Cook said the company expected revenue of about $84bn (£67bn) in the three months to 29 December, down from a previous forecast of $89bn to $93bn that had already disappointed investors.
The tech giant blamed a large and unexpected drop-off in smartphone sales in mainland China, Taiwan and Hong Kong, a region that has been the engine of global growth in recent years.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Mr Cook wrote in a letter published after markets closed on Wednesday.
Shockwaves from Apple’s announcement rippled through markets on Thursday with the pound dropping sharply overnight as trading algorithms moved investors’ money into safe haven currencies such as the Japanese yen.
Sterling recovered the lost ground over the course of the day to trade 0.14 per cent up against the dollar at $1.2625. The pound was down 0.3 per cent against the euro at €1.1076 as London markets closed.
News of Apple’s woes delivered a battering to its suppliers with power chip maker Dialog Semiconductor down 9.2 per cent in Frankfurt. AMS AG, which makes light sensors for smartphones, crashed 19.8 per cent.
Apple’s biggest rival Samsung slipped 3 per cent in Seoul while tech shares dragged European markets lower.
The Stoxx Europe 600 Index fell 3.3 per cent on the day while in the US the Dow Jones Industrial Average dropped 2.6 per cent in early trading before beginning to recover. The S&P 500 fell 1.3 per cent.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Apple’s days of technological supremacy may be numbered unless it can pull off another Steve Jobs-style breakthrough.
“A flagging Chinese economy and fewer upgrades are the headline reasons for Apple’s stumble, but read between the lines and the tech giant is just a whisker away from suggesting it may have pushed customers too hard on price,” Mr Hyett said.
“Fewer subsidies from mobile networks and US dollar strength may be the reasons prices have soared to quite the extent that they have – but with the global economy looking wobbly, we suspect a $1,000 iPhone is a luxury that’s starting to seem excessive to the marginal customer.”
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