But don't worry, the company has a plan for its future, one that anticipates fewer people buying iPhones and Apple shifting its business to new areas of growth like services (think: Apple Music subscriptions and whatnot).
And, yes, this is going to bleed well beyond Apple only pulling down $84 billion in revenue for a single quarter, because...
While iPhone revenue accounted for the forecast cut, Apple's other product categories, including the iPad and services, grew a combined 19 percent year-over-year, he said. Apple CEO Tim Cook wrote a letter to investors, which was issued alongside the press release, and he also spoke to CNBC Wednesday afternoon to answer questions about the quarter and revised guidance.
"We did not foresee the magnitude of the economic deceleration, particularly in Greater China", CEO Tim Cook said in a statement on Wednesday.
In a press release published while trading in its shares was halted, Apple said it expects revenue of about US$84 billion in the quarter ended December 29.
But Cook also listed this among the factors: "Some customers taking advantage of significantly reduced pricing for iPhone battery replacements".
Cook said that the launch timing of the iPhone XS and XS Max when compared to the iPhone X, as well as the strength of the USA dollar, resulted in the phone costing more in specific regions like Canada.More news: Netflix Pulls Hasan Minhaj Episode in Saudi Arabia After Legal Complaint
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China's economy showed the second lowest GDP growth during the second half of 2018 within the last 25 years. The $750 billion company also makes Mac computers, iPads, the Apple Watch and other gadgets and develops and licenses software. China's smartphone market has been down 6% year-over-year in the third quarter of 2018 and is expected to drop by 3% in the fourth quarter of 2018, according to IDC. The news sent Apple's stock plunging after hours.
However, the nitty gritty details in that regard will have to wait and be doled out by Apple later this year when the company gets around to announcing its fiscal first quarter 2019 earnings (which will happen on Tuesday, January 29). "As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores ... in China declining as the quarter progressed".
Though Cook did not acknowledge the eye-watering prices of Apple's new iPhone XS and XS Max - which start at $999 and top out at $1,449 - as a contributing factor to Apple's woes, he did point a finger at "US dollar strength-related price increases". Additionally, Bloomberg's Mark Gurman noted that Cook is slated to address Apple staff about the decline in sales on Thursday - another sign that the company is anxious about these numbers. Apple said it has put more than 100 million new Apple devices into service over the past year. Auto sales have fallen several months in a row.
The fact that Apple took the dramatic step of halting trading is an indication that the company was taken by surprise by the iPhone sales shortfall.
Cut Apple's price target to $197 from $235.
In the latest fiscal year, ended September 29, unit sales of the iPhone were essentially flat from the prior year, while iPhone revenue expanded 18 percent to $166.7 billion.