Apple faces $490 million action over claims Cook misled shareholders

SAN JOSE: A few sentences from Apple boss Tim Cook more than five years ago could cost the iPhone company almost half a billion dollars, reported dpa news.

Apple wants to settle a class action lawsuit that has been running for years with a payment of US$490 million, according to court documents from the weekend.

In a conference call following the presentation of quarterly figures at the beginning of November 2018, Cook made relatively positive comments about business in China.

Two months later, Apple took the unusual step of lowering its revenue forecast by up to US$9 billion - and explicitly referred to the slowdown in business in China. The share price fell and investors took the company to court.

According to the settlement agreement, Apple still does not believe that it has violated any laws or misled investors.

However, the company wants to put the matter behind it, as a continuation of the legal dispute would be lengthy, complex and expensive. The settlement must still be approved by the judge in order to come into force.

Cook had spoken in the conference call on November 1, 2018, about a slowdown in business in emerging markets such as Brazil, India, Russia and Turkey. At the same time, he said he would "not put China in that category."

He then added: "Our business in China was very strong last quarter. We grew 16 per cent, which we're very happy with. iPhone, in particular, was very strong double-digit growth there."

Separately, Cook had also said that Apple saw no evidence that customers were holding back on the more expensive new iPhone XS and XS Max models because they were waiting for the cheaper iPhone XR, which was released later.

However, he qualified that the company only had data for a rather short period of a few weeks.

On January 2, 2019, Apple then announced that the Group was expecting revenue of around US$84 billion for the Christmas quarter just ended - instead of the previously forecast US$89 to US$93 billion.

The company had not foreseen the extent of the economic slowdown, particularly in China, Cook wrote to investors. The lowered forecast was due to lower than expected iPhone sales, mainly in the Chinese market, it said.

--BERNAMA-dpa