What's going on?

Quarterly reporting from Apple � the world�s most valuable public company � included some rotten sales forecasts late on Thursday, and its stock withered 4%.

What does this mean?

Last quarter, Apple sold the same number of iPhones as a year ago � but overall revenue was higher thanks to strong sales of newer devices, more expensive to buy but cheaper to make. The very latest iPhones only launched at the end of the quarter, and so didn�t have much time to make an impact. Although they�ll probably make a splash this quarter (which includes the all-important holiday season), Apple�s not as hopeful as investors. Its forecast for � whisper it � Christmas sales was below expectations (tweet this).


�Services� sales grew by 17% compared to last year � a slowdown from 31% growth the quarter before and missing investor forecasts. But operations like the App Store and Apple Pay and Music have lower costs than, say, making phones and computers: they helped Apple�s profit bounds, like that HomePod ad, keep stretching expectations.

Why should I care?

For markets: Coal in Apple�s stocking.

Apple�s expecting sales of between $89 billion and $93 billion this quarter. It�s below what investors were expecting, with some believing a tougher Chinese economy might put customers there off upgrading their phones (China�s around 20% of Apple�s sales). While Apple�s services business is far and away the Golden Delicious of profit, shifting fewer phones could have a noticeable impact on profit, too.

The bigger picture: Sound off! One, two�

Music streaming service Spotify’s own quarterly results on Thursday were decidedly off-key, with its stock falling to the tune of 5%. The company�s forecast for sales this quarter were a few notes lower than investors had hoped. Meanwhile, Apple (whose music streaming business is only three years old) reportedly eclipsed 12-year-old Spotify�s US subscriber numbers this summer. The combination of Spotify�s low-volume forecast and Apple�s services growth could suggest the battle�s mirroring Instagram�s Stories feature vs. Snapchat�s, well, entire app.