Why Apple faces its biggest crisis since the launch of the iPod

Tim Cook did not hold back. “This is obviously a disaster,” he told finance executives in a 2018 email, ordering his lieutenants to improve underwhelming sales of Apple’s latest iPhones.

Apple’s business in China was sliding, leading to the company’s first profit warning in 16 years. One executive described the performance as “an extreme problem”, while another said employees needed to respond as if it was a “five alarm fire”, according to emails recently released as part of a lawsuit against Apple.

The company later reported two consecutive quarters of revenue decline, a rare dip for a business famous for reliably getting more cash out of its customers each year.

At the time, blame for the poor sales was laid at the foot of Huawei, the Chinese phone giant seen as a domestic rival to the iPhone maker.

“I do think upgraders consider choices [like Huawei] to be more value for money, especially if they don’t see major reasons and new innovation in the iPhone,” wrote Apple’s head of marketing for China.

Ultimately, Huawei did not kill Apple’s business in China. US sanctions effectively crippled Huawei’s ability to make high-end handsets, handing an advantage to the iPhone maker in the process.

Despite fraying relations between Beijing and Washington, Apple went on to post record sales in the Middle Kingdom.

But Cook may have simply delayed the reckoning. Wall Street has recently sounded a new alarm on Apple’s business in China, sending the company’s shares sliding.

It is just one of a number of significant issues facing the world’s biggest company.

In November, the company revealed revenues had fallen year-on-year for four consecutive quarters, the longest slump for more than two decades. Some analysts believe Apple could deliver a fifth quarter of decline when it reports Christmas sales in the coming weeks.

This would mark its longest losing streak since 1998, the year after Steve Jobs returned to save the company from…