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Apple CEO Tim Cook. Photo: Stephanie Keith/Getty Images

Apple warned Wednesday that revenue from its holiday quarter will fall short of prior estimates, a rare occurrence for the iPhone maker.

Why it matters: Apple is one of the world's biggest companies and a significant driver of the tech economy. The company said it now expects revenue of around $84 billion, down from a prior estimate of between $89 billion and $93 billion.

Shares fall: Apple's stock tumbled once after-hours trading resumed after a brief halt. Shares changed hands recently at $146.10, down $11.82 or nearly 7.5%.

In a letter to investors, CEO Tim Cook blamed slow iPhone sales in China for the shortfall.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Cook said. "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."

Cook added that the trade war between the U.S. and China exacerbated the weakening economy there, and that he hasn't seen any signs Apple has been targeted by the Chinese government.

The context: There had been hints of weak iPhone demand for weeks, with a number of reports of suppliers and contract manufacturers cutting production plans. Yet similar reports have also appeared after strong launch quarters, too.

  • Outside of the iPhone and China, Apple said its business was strong. Cook said Apple's non-iPhone businesses (aka services, Mac, iPad, wearables and accessories) up 19% year-over-year. However, the iPhone is the biggest driver of Apple's sales and profits.

Thought bubble, via tech editor Scott Rosenberg: Apple's warning, while rare and a temporary shock to its shares, is probably more alarming for the wider world, since Apple's visibility into what is actually happening in China is likely to be more reliable than more official info on the state of Chinese economy. In other words, this could be worse news for China — and the world economy — than for Apple specifically.

Go deeper

Ina Fried, author of Login
52 mins ago - Technology

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Illustration: Sarah Grillo/Axios

Forced online by the pandemic and overshadowed by the attack on the Capitol, the 2021 edition of CES was mostly an afterthought as media's attention focused elsewhere.

Why it matters: The consumer electronics trade show is the cornerstone event for the Consumer Technology Association and Las Vegas has been the traditional early-January gathering place for the tech industry.

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Capitol rioters, eager to share proof of their efforts with other extremists online, have so far left a digital footprint of at least 140,000 images that is making it easier for federal law enforcement officials to capture and arrest them.

The big picture: Law enforcement's use of digital tracing isn't new, and has long been at the center of fierce battles over privacy and civil liberties. The Capitol siege is opening a fresh front in that debate.

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Episode 6: Last stand in Georgia

Photo illustration: Aïda Amer/Axios. Photo: Drew Angerer, Raymond Boyd/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 6: Georgia had not backed a Democratic presidential candidate since 1992 and Donald Trump's defeat in this Deep South stronghold, and his reaction to that loss, would help cost Republicans the U.S. Senate as well. Georgia was Trump's last stand.

On Air Force One, President Trump was in a mood. He had been clear he did not want to return to Georgia, and yet somehow he'd been conscripted into another rally on the night of Jan. 4.