Apple shares (NASDAQ: AAPL) fell more than 7% after the tech giant cut its sales forecasts on Wednesday.
Whilst the festive season is usually Apple’s greatest trading season, revenue totalled $84 billion – a 5% fall from the same period last year.
“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in greater China.”
“China’s economy began to slow in the second half of 2018. The government-reported GDP growth during the September quarter was the second lowest in the last 25 years,” he wrote.
“We believe the economic environment in China has been further impacted by rising trade tensions with the United States. 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. And market data has shown that the contraction in Greater China’s smartphone market has been particularly sharp,” Cook added.
“We believe that our business in China has a bright future.”
The fall in shares wiped $55 billion (£44 billion) from the group’s value.
Apple’s profit warning is the first in 15 years and has led to worries that consumers are less attracted to buying the latest models of phones.
James Cordwell, an analyst at Atlantic Equities, said: “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.”
Shares in Apple have fallen over 28% since November. Shares in the group (NASDAQ: AAPL) are currently trading -7.54% in after-hours trading at 157.92 (1003GMT).