Apple admits iPhone sales are below expectations
Vendor changed how it reports iPhone sales last year, sparking concerns it was expecting a downturn
Apple has admitted that it will miss its revenue targets in its current quarter, with iPhone sales falling below expectations.
In a letter to investors, CEO Tim Cook blamed the shortcoming on the revenue derived from its smartphone, particularly in China.
He said that Apple had expected struggles in some of its key emerging markets, but "did not foresee the magnitude of economic deceleration".
Apple concerned investors last year when it announced that it will no longer reveal how many units of iPhones, iPads and Macs it sells.
Cook however stressed that Apple's performance outside the iPhone has been as expected.
"Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline," he said.
"In fact, categories outside iPhone - services, Mac, iPad, wearables, home, accessories - combined to grow almost 19 per cent year over year.
"While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be.
"While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements."
Apple said it expects revenue for its Q1 to be $84m (£66.8m), having previously forecast sales of at least $89m.
The vendor said that other items will be in line with expectations, with a gross margin of 38 per cent and operating income of around $500m.
Apple will publish its results for Q1, which ended on 29 December, at the end of this month.
Microsoft closed out 2018 as the most valuable publicly listed company in the world, after Apple saw its share price fall as much as 36 per cent between October and the end of the year.
Cook's letter saw its shares fall over seven per cent in after-hours trading.