Cooked: Apple shares spiral as investors launch 'securities fraud' lawsuit

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In a letter to investors Wednesday, CEO Tim Cook explained that Apple is grappling with several issues, many related to China.

The rare warning of disappointing results from Apple stoked investors' fears that the world's second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse. The offer comes after Apple iPhone sales in China lost momentum in November, with shipments tanking 22.8% month-over-month and iPhone's market share dropping to 11.7%. They're supplying devices that compete on quality at much more affordable prices, and have set up huge local manufacturing operations to avoid tariffs and keep costs down. Asian suppliers' stocks also fell, as did shares of Samsung. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions and slower growth in China are damaging their businesses.

Wall Street stocks have slid sharply in the wake of a warning from Apple (NasdaqGS: AAPL - news) that its revenues would fall short because of a slowdown in China.

Despite all that, Apple continues to face fierce competitive pressure from Android smartphone makers trying to move into the premium portion of that market - and I don't see that abating in 2019.

Apple's $1,000 iPhone is a tough sell to consumers in China unnerved by an economic slump and the trade war with the U.S. "China is the biggest beneficiary of Apple. because they build their product mostly in China". Universal Display Corp. declined 3.5 per cent and Lumentum Holdings Inc. tumbled 8.7 per cent. Shares of US retailers that sell Apple products were also weak on the news. "And market data has shown that the contraction in Greater China's smartphone market has been particularly sharp".

Kim Jong-un's new year message
To that end, Kim used his New Year's address to call for a permanent end to joint military drills between the USA and South Korea. Secretary of State Mike Pompeo and senior North Korean officials after the North canceled it at the last minute in November.

Market jitters even extended briefly to the Brexit-battered pound, which tumbled to a 21-month low close to $1.24 overnight against the U.S. dollar in a "flash crash" triggered by an exodus from currencies considered riskier - before very quickly recovering the losses to return to around $1.26.

Apple is one of the most powerful tech companies on the planet. The world's second largest economy is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels.

Shares of US -based Apple suppliers and chipmakers including Cirrus Logic Inc CRUS.O , Skyworks Solutions Inc SWKS.O , Analog Devices ADI.O , Broadcom Inc AVGO.O , NXP Semiconductors NV NXPI.O and Micron Technology Inc MU.O all tumbled.

Another question mark for Apple is its 5G strategy in China, where the USA firm is not expected to have a 5G-enabled phone until 2020, behind rivals like Huawei, Xiaomi Corp and Samsung Electronics. France's CAC 40 and Germany's DAX were the biggest losers, shedding around 0.7%.

'Typically my needs for my phone are high speeds for downloading videos or transferring files from chat apps. The Nasdaq fell 83 points, or 1.2 percent, to 6,582. Services generated $10.8 billion in revenue for the quarter - a 27 percent increase from a year earlier.