web analytics

Apple Agrees to Pay $490M to Settle Lawsuit Alleging That Tim Cook Defrauded Shareholders

From www.macrumors.com

Apple has agreed to pay $490 million to settle a class action lawsuit alleging that Apple CEO Tim Cook defrauded shareholders by concealing falling demand for iPhones in China, according to Reuters, which cited a court filing today. The proposed settlement requires approval by U.S. District Judge Yvonne Gonzalez Rogers in California.

Tim Cook iPhone 11 Pro
On a November 1, 2018 earnings call with analysts, Cook said Apple was facing pressure in emerging markets where local currencies were weakening, such as Turkey, India, Brazil, and Russia, but he did not include China in the list:

The emerging markets that we’re seeing pressure in are markets like Turkey, India, Brazil, Russia. These are markets where currencies have weakened over the recent period. In some cases, that resulted in us raising prices and those markets are not growing the way we would like to see.

Cook went on to say the following about China on the call:

In relation to China specifically, I would not put China in that category. Our business in China was very strong last quarter. We grew 16%, which we’re very happy with. iPhone in particular was very strong, very strong double-digit growth there. Our other products category was also stronger, in fact, a bit stronger than even the overall company number.

A few months later, in January 2019, Cook shared a letter to investors indicating that Apple’s revenue for the fourth quarter of 2018 would be around $84 billion, lower than its original guidance of between $89 billion and $93 billion in the quarter. Apple ended up reporting revenue of $84.3 billion in the quarter on January 29, 2019.

Apple’s share price dropped around 25% between November 1, 2018 and January 31, 2019.

In his letter, Cook said the Greater China region’s slowing economy was largely to blame for Apple’s revenue shortfall in the quarter:

While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.

The letter added that lower-than-anticipated iPhone revenue, primarily in Greater China, accounted for the entire revenue shortfall:

Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline.

Investors alleged that Cook knew that iPhone demand was falling in China at the time of the November 2018 earnings call, but failed to disclose it. Apple has denied these allegations and has not admitted to any wrongdoing. Apple only agreed to the proposed settlement to avoid additional costs and time involved with litigation, the filing says.

Popular Stories

iPhone 16 Pro Expected Later This Year With These 10 New Features

While the iPhone 16 Pro and iPhone 16 Pro Max are still around six months away from launching, there are already many rumors about the devices. Below, we have recapped new features and changes expected so far. These are some of the key changes rumored for the iPhone 16 Pro models as of March 2024:Larger displays: The iPhone 16 Pro and iPhone 16 Pro Max will be equipped with larger 6.3-inch…

iPhone SE 4 Expected to Depreciate Heavily

Resale value trends suggest the iPhone SE 4 may not hold its value as well as Apple’s flagship models, according to SellCell. According to the report, Apple’s iPhone SE models have historically depreciated much more rapidly than the company’s more premium offerings. The third-generation iPhone SE, which launched in March 2022, experienced a significant drop in resale value, losing 42.6%…

Apple Said iPhone Driver’s Licenses Would Expand to These 8 U.S. States… Two Years Ago

In just four U.S. states, residents can add their driver’s license or ID to the Apple Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age at select airports, businesses, and venues. Adoption of the feature has been slow since Apple first announced it in September 2021, with IDs in the Wallet app only available in Arizona,…

2024 iPad Pro: Key Rumors to Be Aware of Ahead of Announcement

Apple’s next-generation iPad Pro models are expected to be announced in a matter of weeks, so what can customers expect from the highly anticipated new machines? The 2022 iPad Pro was a minor update that added the M2 chip, Apple Pencil hover, and specification upgrades like Wi-Fi 6E and Bluetooth 5.3 connectivity. The iPad Pro as a whole has generally only seen relatively small updates in…

Apple Preparing iOS 17.4.1 Update for iPhone

Apple appears to be internally testing iOS 17.4.1 for the iPhone, based on evidence of the software update in our website’s logs this week. Our logs have revealed the existence of several iOS 17 versions before Apple released them, ranging from iOS 17.0.3 to iOS 17.3.1. iOS 17.4.1 should be a minor update that addresses software bugs and/or security vulnerabilities. It is unclear when…

Apple Announces Ability to Download iPhone Apps From Websites in EU

Apple today announced three further changes for developers in the European Union, allowing them to distribute apps directly from webpages, choose how to design in-app promotions, and more. Apple last week enabled alternative app stores in the EU in iOS 17.4, allowing third-party app stores to offer a catalog of other developers’ apps as well as the marketplace developer’s own apps. As of…

Apple Buys DarwinAI Ahead of Major Generative AI Updates Coming in iOS 18

Thursday March 14, 2024 10:27 am PDT by

Apple acquired Canada-based company DarwinAI earlier this year to build out its AI team, reports Bloomberg. DarwinAI created AI technology for inspecting components during the manufacturing process, and it also had a focus on making smaller and more efficient AI systems. DarwinAI’s website and social media accounts have been taken offline following Apple’s purchase. Dozens of former DarwinAI …

Video Comparison: M3 MacBook Air vs. M3 MacBook Pro

Tuesday March 12, 2024 10:42 am PDT by

With the refresh of the MacBook Air models in March, Apple now has M3 versions of the 13-inch MacBook Air, 14-inch MacBook Pro, and 15-inch MacBook Air, all with the same chip inside. For those trying to decide between the MacBook Pro and the MacBook Air, we did a comparison video to highlight what you’re getting with each machine. Subscribe to the MacRumors YouTube channel for more videos. …

[ For more curated Apple news, check out the main news page here]

The post Apple Agrees to Pay $490M to Settle Lawsuit Alleging That Tim Cook Defrauded Shareholders first appeared on www.macrumors.com

New reasons to get excited everyday.

Get the latest tech news delivered right in your mailbox

You may also like

Notify of
Inline Feedbacks
View all comments

More in Apple

Would love your thoughts, please comment.x