As of: March 18, 2024, 9:48 p.m
By: Markus Hofstetter
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When speaking to investors, board members have to weigh every word.
Otherwise it can be expensive, as Apple boss Cook has found out.
Cupertino - Apple has apparently agreed to a payment of $490 million.
This is intended to settle a class action lawsuit brought by shareholders.
The preliminary settlement was filed on Friday (March 18) in federal court in Oakland, California.
In order for the settlement to become legally binding, it must be confirmed by a judge.
This sentence costs Apple almost half a billion dollars: China business initially presented positively
The class action lawsuit was directed against Tim Cook's previous statements about the China business.
In a conference call after the quarterly figures were presented on November 1, 2018, the CEO spoke of a slowdown in business in emerging countries such as Brazil, India, Russia and Turkey.
“I wouldn’t put China in that category,” Cook said after listing these countries.
Because of a six-year-old statement by Tim Cook, Apple is paying $490 million © Noah Berger/AP/dpa/archive image
Separately, Cook also said that Apple saw no evidence that customers were not buying the more expensive new iPhone XS and XS Max models because they were waiting for the cheaper iPhone XR to be released later.
However, he restricted that the company only had data available for a relatively short period of a few weeks.
This sentence costs Apple almost half a billion dollars: forecast lowered due to weak China business
But just two months later, on January 2, 2019, Apple lowered its sales forecast for the fourth quarter of 2018. Instead of the forecast $89 to 93 billion, the company only expected $84 billion.
The fatal thing about it: Apple explicitly referred to weak business in China.
The forecast reduction was due to lower than expected iPhone sales, especially in the Chinese market, it said.
The share price then fell and investors went to court.
However, in the settlement agreement, Apple denies violating any laws or misleading investors.
However, the company wants to put the matter behind it, as continuing the legal dispute would be lengthy, laborious and expensive.
This is not the first fine for Apple in a very short period of time.
It was only at the beginning of March that the EU Commission imposed a competition fine of 1.8 billion euros on the tech giant.