In his letter, Cook explained that his company was selling less iPhones than expected because of China's slowing economic growth, something that's not being helped by its ongoing trade war with the United States.
Why it's important: While Apple has blamed support for Chinese brands and a slowing economy on its revenue drop, analysts pointed out that the company itself may be to blame. While macroeconomic challenges in some markets were a key contributor to this trend, Apples believes there are other factors broadly impacting its iPhone performance, including consumers adapting to a world with fewer carrier subsidies, USA dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.
Click the audio player above to hear Marketplace reporter Ben Bradford on how Apple's services could make up for the tech company's softer smartphone sales. Apple's market share has dropped to 7.5% in the third quarter from 11.2% in the first quarter, while Huawei has been in the lead with an average market share of 25.5%, according to IDC.
Kevin Hassett, a top economic adviser to the president, acknowledged Thursday that the trade war is damaging United States businesses that have interests in China - and "a heck of a lot" of U.S. companies will have the same problem as Apple unless a deal is struck to lift tariffs.
Although the iPhone has not been affected directly by the tariffs, Mr Cook said it had put a strain on the Chinese economy.
Slumping financial markets seemed to hurt consumer confidence in China, he said, "with traffic to our retail stores and our channel partners in China declining as the quarter progressed".
Apple's revised battery program began at the beginning of 2018 and lasted just one year.
Later in the missive, however, Steve Jobs former right-hand man would admit that the iPhone has also fallen short of expectations, both in its emerging and established markets around the world. In his letter, Cook said that more than 100% of the company's worldwide revenue decline was in China for sales of iPhones, Macs and iPads.
But China isn't the only problem market for Apple.
Apple has become the target of nationalist sentiment over the arrest of Huawei's chief financial officer in Canada at the behest of the USA for alleged Iran sanctions violations.
Earlier today Bloomberg interviewed Larry Kudlow, National Economic Council Director in the Trump administration, to talk about the blowout good news with the December Jobs report while touching on Apple in respect to China. He also said Apple is seeing fewer iPhone upgrades than expected, which partially accounted for the new guidance.