Why Apple stumbled this week

This week's crop of tech earnings turned out pretty well, with Amazon, Facebook, and LinkedIn all posting better-than-expected results.

But there was one big exception: Apple. Not only did Apple report its first quarterly revenue and profit decline (vs the previous year) since 2003 - which everyone was expecting - it also missed Wall Street's expectations and downgraded Q2 guidance. CEO Tim Cook blamed the larger economic picture, and said "the smartphone market, as you know, is currently not growing."

This chart from Morgan Stanley's Tech Hardware Pulse, based on numbers from IDC, shows the starkness of the slowdown.

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Cook believes the market will recover as the global economy picks up, saying "This too shall pass." Morgan Stanley seems to agree, citing tough economics in emerging countries. But the firm also warns that the "developed country smartphone market is maturing." In other words, in regions like the U.S. and Europe, almost everybody who wants a smartphone has one. Which means Apple - and other smartphone makers - are going to have to find ways to accelerate upgrades, or accept that the big smartphone boom is over and find other products to pick up the slack.

IDC via Morgan Stanley

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