iPhone costs, innovation and waning market hurt Apple, analysts say

Overpriced iPhones, anemic innovation and market saturation forced Apple on the first trading day of the year to take a bite out of its revenue guidance, analysts and investors told CNBC on Thursday.

After cutting fiscal first-quarter guidance by about 8 percent on Wednesday, CEO Tim Cook heaped much of the blame on China’s economy and Sino-U.S. trade relations in a preliminary disclosure.

Apple bull Gene Munster, who predicts the tech giant will be a top performer in the so-called FAANG group, said the cut is not because of competition or a shift in consumer needs.

“This is caused by some issues around economics and some mistakes the company’s made around aggressively pricing their phones,” the Loup Ventures founder said on “Squawk Box.” “They jumped the price [of iPhones] by 23 percent this fall.”

Apple reduced its revenue estimates, from as much as $93 billion to $84 billion, along with gross margin. The decrease was driven, among other factors, by weaker-than-expected iPhone sales in emerging markets with a shortfall coming “primarily in greater China,” Cook said in an interview with CNBC’s Josh Lipton on Wednesday.

But AlphaOne Capital Partners’ Dan Niles, who turned sour on the stock last May, told CNBC on Thursday that many of the challenges Cook pointed to were already known halfway through 2018. He scolded Apple for having the “wrong strategy” in raising iPhone prices in emerging markets, including Brazil, Russia and India.

“Part of the issue here is that Apple’s not acknowledging the real problems that they have,” Niles said later on “Squawk Box.”

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