Apple sales forecast dip despite Samsung's troubles

Apple Inc. investors expected the iPhone maker to take advantage of the meltdown of Samsung Electronics Co. rival Galaxy Note 7 smartphone with a robust holiday sales forecast. However, the revenue projection was barely higher than analysts’ estimates, with shares tumbling as much as 3.1 per cent in extended trading. Faith in Apple’s growth prospects has become more fragile after the world’s most valuable company on Tuesday reported its first annual sales decline since 2001. The Cupertino, California-based company’s revenue in China, the driving force behind stronger sales in 2015, declined 17 per cent in this fiscal year, prompting questions from analysts about the source of further expansion. Apple forecast sales of $76 billion to $78 billion for the last three months of 2016, compared with analysts’ average estimate of $75.4 billion. The numbers don’t seem to account for Samsung’s decision earlier this month to stop manufacturing the Note 7 after the phones and some replacement models overheated and caught fire. Samsung’s handset was intended to compete with Apple’s iPhone 7 for customers’ holiday spending. Apple said its gross margin forecast, a closely watched measure of profitability, will be 38 per cent to 38.5 per cent in the three months through December. That compares with analysts’ forecasts of 38.9 per cent. (Alex Webb/Bloomberg)