Apple plunges most in nearly six years on IPhone slump

Market swoon raises stakes for US-China trade talks next week

"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 writes in the letter.

Some analysts, however, questioned the impact of Apple's own actions, such as its unyielding pursuit of high selling prices for its products.

The China slowdown comes as Apple faces other obstacles in some of its biggest markets.

The company cited struggling iPhone sales in China when it cut its quarterly revenue forecast on Wednesday for the first time in nearly two decades. The stock plunged almost 10% Thursday to $142.19 a share, its biggest one-day decline in six years.

Cook blamed the lowered forecast on several different factors, including the timing of its latest generation iPhone launches, a strong U.S. dollar creating foreign exchange headwinds, supply constraints, and economic weakness in some emerging markets.

Analysts see iPhone's high price point and lack of major updates as the major reasons for the Chinese market's lukewarm reaction to its new iPhone releases.

Wednesday was the first time that Apple issued a warning on its revenue guidance ahead of releasing quarterly results since the iPhone was launched in 2007.

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One thing Cook didn't mention in his letter is Apple's declining market share in China and the rise of domestic rivals like Huawei and Oppo. In the broader market, the S&P 500 futures fell 1.5 percent. Emerging markets, beyond China, are too small to move the needle for Apple, Jain says.

Qualcomm Inc said it had posted security bonds to enforce a court order banning sale of some iPhone models in Germany, meaning Apple would likely have to pull iPhone 7 and 8 models from its 15 stores in the country. And after several component makers in November forecast weaker-than-expected sales, some market watchers called the peak for iPhones in several key markets. Cook blamed "economic deceleration" in emerging markets and decreased demand for iPhones as drivers for the unanticipated shortfall - particularly pointing to the slowdown of China's economy in the latter half of 2018. But he said then that he "would not put China in that category" of countries with troubled growth.

Cook also spoke of "rising trade tensions with the United States" which has seen Apple become the target of a boycott campaign by prominent Chinese companies, something which has escalated more when Huawei's CFO was arrested in Canada. According to the Los Angeles Times, Apple's announcement "stoked investors' fears that China's economy, the world's second largest, is losing steam and that the U.S".

But Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy.

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 a year ago, when it pocketed $88.3bn.

Others advised Cook to stop pointing the finger at China, and instead fix the flaws in Apple services and work on new products.

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