In explaining the change, Cook said Apple "did not foresee the magnitude of the economic deterioration" in markets including greater China.
Cook said the iPhone "accounts for all of our revenue shortfall", whereas other products in Apple's lineup such as the Mac and iPad are seeing strong growth. "We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability, and creativity, and to emerge better as a result".
The new revenue expectation compares with a figure of $88bn reported in the same period past year. Investors worry that the economic slowdown in China and fewer Apple device sales signal the start of a bull market in the United States markets.
But just as Apple hits a revenue speed bump, after it made a decision to keep its iPhone sales figures a secret, Chinese smartphone maker Huawei's handset sales are skyrocketing. The company also sees the traffic to retail stores and partner sellers in China declining in the quarter.
Apple's first instance of revised earnings guidance since 2002 rattled financial markets as it put the spotlight on China's woes and the dependence of the largest USA companies on strong growth in the world's second-largest economy.
CEO Tim Cook blamed the slump on a slowing economy in China, where Apple has also faced competition from Huawei and Xiaomi. Based on our best estimates of how these would play out, we predicted that we would report slight revenue growth year-over-year for the quarter.
"We believe the economic environment in China has been further impacted by rising trade tensions with the United States".
Production cuts by major suppliers had led to worries that the firm's newest phones were not gaining traction among buyers, in part due to high prices. When the suspension on selling was lifted, Apple shares fell 7.45%.