Blaming the vagaries of the trade tensions with China and the hard reality of low iPhone sales there and elsewhere, Apple CEO Tim Cook yesterday told investors that his company is lowering its guidance for the first quarter of 2019, which sent its stock spiraling about 7% in after-hours trading. It now expects to generate $84 billion in sales for the quarter that ended on Dec. 29; it had originally projected Q1 $91 billion.

“Apple said the lower-than-anticipated revenue happened ‘primarily in Greater China,’ but also said that upgrades to new iPhone models in other countries were ‘not as strong as we thought they would be,’” writes CNBC’s Steve Kovach. “Cook's letter said fewer carrier subsidies, price increases based on the strength of the U.S. dollar and cheaper battery replacements caused the weak iPhone upgrades for the quarter,” he adds.

On a broader scale, Cook’s announcement “suggested not just significant business challenges emerging for Apple, which briefly became the most valuable U.S. company in history last year, but deeper concern about how the trade war might be contributing to a global economic slowdown led by China,” Tony Romm, Danielle Paquette and Heather Long observe for the Washington Post. “China has the second-largest economy in the world and is the third-largest buyer of U.S. exports after Mexico and Canada, meaning that what happens can quickly affect U.S. growth and employment,” they add.

“There’s massive uncertainty because of the trade war,” Shaun Rein, managing director at the China Market Research Group in Shanghai, tells them about China’s economy. “We’re seeing the weakest retail sales in years.”

“Analysts have also been closely watching China’s economy for signs that increasing Chinese nationalism, combined with higher-quality China-made products, is moving consumers to purchase local brands. Signs have begun to emerge: For the first time, last year four of five of the top-watched films in China were Chinese, according to Box Office Mojo. Local brands continue to outgrow multinational corporations in the food and beverage sector, according to Goldman Sachs,” Robert McMillan and Tripp Mickle point out for the Wall Street Journal.

USA Today’s Edward C. Baig asks the question that usually comes to mind when lackluster sales lead to too much of a coveted thing remaining in warehouses: “Might Apple CEO’s modified guidance … work in the favor of consumers who have been infatuated with some of Apple’s latest products but put off buying them because of their lofty prices?”

Avi Greengart, research director for consumer platforms and devices at GlobalData, tells Baig that Apple just might try to do just that by juicing up promotions in the U.S. and Europe. “We've already seen Apple offer higher trade-in values -- and aggressively advertise the resulting ‘price’ of the iPhone as a result,”  Greengart says.

“Tim Cook’s decision to push the price of the iPhone higher has allowed Apple to increase margins and build up a record-breaking financial position for the company, but it has not seen a noticeable increase in annual handset [sales] years since the launch of the iPhone 6 Plus. That flat sales line is looking to be on a downward trajectory -- just as Cook informs his stockholders that Apple will no longer be reporting unit sales and will be focusing on software and ancillary services revenue to maintain income,” points out Ewan Spence for Forbes.

“But how can you increase the ancillary sales if the front-line product is no longer selling?”

Spence continues: “This is where Apple needs to sit down and decide if it wants to become a boutique high-end luxury smartphone maker, or if it wants to be a significant volume player in the industry.”

Indeed, although he has successfully dealt with a number of controversies during the more than seven years since he succeeded Steve Jobs as CEO, Cook has his work cut out for him, Bloomberg’s Mark Gurman suggests.

“This is probably one of the hardest things Tim Cook has had to do as CEO, putting out that letter today,” Michael Gartenberg, a former Apple marketing executive who has followed the company for decades, tells him. 

And Wedbush Securities analyst Daniel Ives believes “this is going to be the most defining moment of Cook’s career.” He says Apple has two choices: “Cut prices and figure out China and realize recent iPhone pricing was a mistake, or they can have a sense of hubris and continue the current strategy.” He expects Cook will go with the former.

That would delight consumers. Whether it will calm the market is another question.