iPhone trouble: Apple said Tuesday that its revenue for the first three months of 2019 declined 5% to $58 billion. The big problem? Smartphone sales for the period fell 17%.
Apple warned investors in January that iPhone sales had taken a hit from an economic slowdown in China. CEO Tim Cook suggested Tuesday that the worst may be over, saying Chinese shoppers had responded to price cuts.
But modest price reductions may not be enough to compete with Chinese smartphone makers like Xiaomi and Huawei.
Huawei shipped 30 million phones in China in the first three months of the year, more than any other company and a 41% increase over the same period in 2018, according to research firm Canalys.
Apple (AAPL) sales in China in the first quarter plunged by 30% to 6.5 million phones — its worse decline in two years, according to Canalys.
2. Fed guidance: The Federal Reserve will announce its latest interest rate decision and policy update at 2:00 pm ET.
The US central bank is not expected to change rates, but investors will be paying close attention to Fed Chairman Jerome Powell’s views on the economy.
After raising rates four times last year, the Fed took its foot off the gas in January. But rate cuts have been made unlikely by a very strong performance by the US economy in the first quarter. Global growth also appears to be recovering.
3. The future of Facebook: Facebook (FB) debuted a makeover for its main app on Tuesday that reflects the company’s new emphasis on privacy.
“I know we don’t exactly have the strongest reputation on privacy right now, to put it lightly,” said CEO Mark Zuckerberg, acknowledging skepticism around the move. “I am committed to doing this well.”
It’s unclear if a new design and approach to privacy will usher in real change for the beleaguered company, or if it’s just a new coat of paint.
Zuckerberg outlined principles he said the company is now focusing on, including private interactions, encryption, disappearing content and secure data storage.
He also said he would integrate Instagram and Whatsapp more closely. Investors are eager to understand how the changes will affect the company’s advertising business.