In the fiscal first quarter, iPhone revenue fell 15% from a year ago to US$51.98bn, missing consensus market forecasts of US$52.67bn.
Total revenue dropped 5% to US$84.3bn, compared to analysts’ estimates of US$83.97bn, due to a weak performance in China and emerging markets such as Brazil, India and Russia.
Chief executive Tim Cook admitted that customers were struggling with Apple’s high prices and were holding onto older iPhones for longer than in the past.
"When you paired this with the macroeconomic factors particularly in emerging markets, it resulted in iPhone revenue that was down 15% from last year," Cook said.
He added that a stronger dollar made Apple products more expensive in markets outside the US.
In a bid to address sluggish sales, Cook said Apple has started to re-price its phone to protect customers from the impact of currency fluctuations.
"What we have done in January in some locations and [for] some products is essentially absorb part or all of the foreign currency move as compared to last year," he said.
For the second quarter, Apple expects revenues of US$55bn to US$59bn, representing a decline of at least 3.4% compared to a year ago. Analysts expect revenue of US$58.83bn for the period.
"The macroeconomic environment, particularly in emerging markets, will continue to be there," chief financial officer, Luca Maestri, said.
Earlier this month, Apple shares plunged after issuing a rare revenue warning for the first quarter, blaming weak China demand. It lowered its revenue forecast to US$84bn for the period from a previous guidance range of US$89bn and $93bn.
Cook said trade tensions between the US and China has hurt consumer spending on smartphones in the Asian nation. Slowing growth in emerging markets had also dented sales.