Stock trading was temporarily halted Wednesday while Apple lowered its guidance.
However, he added that developed markets saw troubles as well, as fewer customers than expected chose to upgrade to Apple's newest phones. Apple estimated that it would make $91 billion over the last quarter, but has since revised this to $84 billion in revenue, with a gross margin of 38 percent. He also said the timing of product releases, as well as a slowing of the Chinese economy played a factor.
In November, the company said it would stop reporting unit sales of iPhones, iPads and Macs beginning in fiscal 2019. On Wednesday, China's central bank magazine said the country's economic growth could fall below 6.5 per cent in the fourth quarter as companies face increased difficulties there.
"As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed", he wrote.
Apple's new lineup of iPhones did not have a happy holiday.More news: Trump's wall may be different than advertised
More news: Chelsea could decide Eden Hazard's future for him in January - Maurizio Sarri
More news: Stranger Things Season 3 Release Date Announced With New Teaser And Poster
The news sent Apple shares tumbling in after-hours trade and triggered a broader selloff in the stock market, with S&P 500 futures falling 1.5 per cent. Apple dropped 7.5 per cent and iPhone component suppliers also fell as investors anxious about softer demand across the technology industry.
Apple originally forecast revenue of between $89 billion and $93 billion. While that sounds alright in theory, we can't help but think Apple should try a bit harder, perhaps even shift to focus on services more.
Apple shares sank about 9% at the start of trading Thursday, a day after the company issued a rare earnings warning that it chalked up largely to sluggish iPhone sales in China. The strength of the USA dollar has reduced Apple's revenue growth "by about 200 basis points as compared to the previous year".
In his letter, Cook blamed the earlier launch timing of the iPhone XS and XS Max compared to the iPhone X, the strength of the USA dollar, supply constraints due to the number of new products Apple released in the fall, and overall economic weakness in some markets. In an unscheduled update it said there had been a "significantly greater impact than we had projected" from slower growth in emerging markets.
But most of those new Samsung smartphones, as well as those from Apple and other OEMs, will likely cost more than what many are willing to pay. It didn't have the latest and greatest specs to satisfy the hardcore Apple fanboy, but at $750, it is still a fairly expensive upgrade for consumers used to that baseline $650 for a new iPhone.