Investors also were encouraged by news that the USA and China will hold trade talks in Beijing on January 7 and 8.
Apple shares plummeted almost 10 percent on the news Thursday, with the company shedding some 38 percent since its valuation hit $1 trillion past year. Apple has also recently signaled that its iPhone business may be struggling by launching special promotions for buying new iPhones-an extremely rare move by the company.
In fessing up to the looming fiscal disappointment, the Apple boss blamed the shortfall not on the eye-wateringly high prices for its latest lines of kit, but rather on the people of China, who let Apple down by not purchasing as many shiny doodads as was expected of them. Apple originally forecast revenue of between $89 billion and $93 billion. Trump also made it a point to say that Apple CEO Tim Cook is a "friend" of his and he wants Apple to make products in USA and not China which they do now.
"In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad", Cook said in the letter.
Bhansali described the warning as a red herring because Apple should have foreseen the problems when they cut their earnings outlook in the third quarter.
On the other hand, Cook also stressed that Apple showed considerable strengths in other areas (particularly in its cash assets: the company is now sitting on about $130 billion). Cirrus Logic Inc. went down 2.91 points, or 8.49 percent, to $31.35.
Apple's first instance of revised earnings guidance since 2002 has the potential to rattle the financial markets as it puts the spotlight on China's woes and the dependence of the largest USA companies on strong growth in the world's second-largest economy.
Apple isn't the only company facing difficulties in a slowing Chinese economy and escalating trade tensions.
A slew of brokerages had reduced their first-quarter production estimates for iPhones after several makers forecast weaker-than-expected sales, leading some market watchers to call the peak for iPhones in several key markets. Services generated $10.8 billion in revenue for the quarter - a 27 percent increase from a year earlier. But he said then that he "would not put China in that category" of countries with troubled growth.
The 64 GB variant of the iPhone XScosts about $430 more in Indiathan it does in the United States.
Apple attributes disappointing sales to the slowdown of China's economy.
Consumers are more likely to curb spending on big-ticket items during economic downturns, and there are worries over "consumption downgrade" in China. As the U.S. -China trade war drags on, it's having an impact on these sales. Cook suggested in his investor letter that what happened to Apple was a temporary blow from unforeseen economic weakness in China.
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.
Energy lost some ground even though the price of West Texas Intermediate hit its highest level in two weeks.
Trump said Apple has gone up "hundreds of percent" since he's been president, but added that he wants the company to make its iPhone and other products in the US.
But some investors were heartened by Apple's plans on using its cash pile.
Japanese shares tumbled and Shanghai's benchmark climbed Friday as Asian markets steadied following a technology-led sell-off on Wall Street.
The U.S. and China have raised tariffs on billions of dollars of each other's goods in a fight over Beijing's technology policy, which Washington alleges is predatory.