The company said it now sees fiscal first-quarter revenue of $84 billion, below the $89 billion to $93 billion that it had previously expected.
When compared to the estimates provided by Apple to its investors in November, the revenue amount took a drastic nosedive, while the "other income/(expense)" category went through the roof, reaching approximately $550 million from an initial estimate of $300 million.
What's interesting is that China is attributed as the main source of year-on-year iPhone revenue decline while iPhone upgrades were not as strong as they hoped for in some developed markets. In his letter, Cook said that more than 100% of the company's worldwide revenue decline was in China for sales of iPhones, Macs and iPads.
If Apple racks up some $84bn by the end of the first quarter, it will be a decrease of more than $4bn from the same period previous year, when it pocketed $88.3bn.
Apple also expects to announce record earnings per share and to adjust to the more hard market with better trade-in and financing deals.
"The question for investors will be the extent to which Apple's aggressive pricing has exacerbated this situation and what this means for the company's longer-term pricing power within its iPhone franchise", James Cordwell, an analyst at Atlantic Equities, told Reuters.
Mr Cook cited China as Apple's biggest weak spot, but also said that consumers weren't upgrading to the latest iPhones' models as eagerly as anticipated. China's economy has been pinched by the ongoing Sino-US trade war which is spilling over to other Asian economies. "This turned out to have a significantly greater impact than we had projected", Cook said in the letter.
They have fallen more than 32 per cent from an October peak amid growing concerns about the iPhone - by far Apple's most important product line, comprising more than 60 per cent of its 2018 revenue.
White House economics adviser Kevin Hassett was in a chipper mood on Thursday as he predicted many companies will announce lower than expected earnings as a result of the trade war with China. Apple's shares were briefly suspended on Wednesday night, and in post-market trading fell by up to 8pc, wiping nearly $60bn off its value. Investors will be glad to hear Apple's expecting to report "a new all-time record for Apple's earnings per share".
Apple's share price dropped by 10 per cent the back of the update.