Most of the claims in the case were dismissed by U.S. District Judge Yvonne Gonzalez Rogers, but she ruled that the shareholders have cause to sue over Apple CEO Tim Cook's comments in November of 2018, in which he said there was strong demand for iPhones.
He said the sales for the iPhone XS and XS Max had been “really great” and said China had seen stronger sales than other markets, Reuters reporter.
Then, a few days later, Cook told Apple manufacturers to curb production, telling the manufacturers Foxconn and Pegatron to stop plans for a new production line, while telling a key supplier to reduce shipments.
Rogers wrote that it was “simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines” unless some kind of natural disaster had happened. She said Apple’s decision to stop reporting sales also indicated that Cook knew the sales would be going down.
The complaint is led by the Employees’ Retirement System of the State of Rhode Island. The issue started in June 2019, when Cook unexpectedly reduced the company's quarterly revenue forecast by $9 billion, partly because of the trade dispute between the U.S. and China. That was the first time Apple had reduced a forecast, which caused its shares to tumble 10 percent the next day, erasing $74 billion in market value.
Apple has been readying to reopen with the rest of the world in the aftermath of the lockdowns from the pandemic. It announced plans to reopen around 100 U.S. stores in late May, primarily focused on the Genius Bar to let customers get support for problems with products, but phasing in walk-in customer services, too.