The announcement about the revised quartely guidance came from Apple chief executive officer Tim Cook, who in a letter to the investors, said that the company was expecting lower revenue in the past quarter than previously anticipated.
"The much larger issue is the slowing of the (Chinese) economy, and then the trade tension that has further pressured it", Cook said.
To help boost iPhone sales, Cook said Apple will expand its financing plans and build upon its recent efforts to make it easier to trade in older models at its stores.
Customers look at new Apple watches including the Series 4 at an Apple store in NY on September 21, 2018. In the USA government bond market, a typical safe-haven, the yield on the benchmark 10-year, which moves inversely to the bond's price, sank to an 11-month low.
Fourth-quarter revenue is expected to be more around $84 billion. "In addition, these and other factors resulted in fewer iPhone upgrades than we had anticipated".
Cook also told CNBC that the company's products had not been targeted by the Chinese government, though some consumers may have chosen another brand due to the fact that Apple is an American company. The company also expects a gross margin of approximately 38 per cent and other expenses to sit around $550 million approximately.
Mr Cook said Apple's revenue for the quarter including the crucial holiday shopping season will fall well below Apple's earlier projections and those of analysts, whose estimates sway the stock market. Once trading on the stock resumed in after-hours trading, the stock fell 8% to $145.15 a share.
China is not only the problem for Apple.
Apple has held firm on its premium pricing strategy in China despite the risk of a slower economy, a factor that has been exacerbated by the strong US dollar.
SAN FRANCISCO-Apple acknowledged that demand for iPhones is waning, confirming investor fears that the company's most profitable product has lost some of its luster.
"We believe the economic environment in China has been further impacted by rising trade tensions with the United States". That wiped up to $55 billion off of the company's stock market value.
"We would anticipate the company increasing share buybacks on the weakness to return capital to shareholders at discount prices", said Trip Miller, managing partner at Apple shareholder Gullane Capital Partners.
The warning, which came after trading in NY closed on Wednesday, looked likely to rattle already-volatile stock markets when they reopen on Thursday - with stock index futures pointing to Wall Street falls.