Apple issued revised revenue guidance for its December quarter from US$91 billion to US$84 billion, which implies a 5 per cent year-over-year decline.

The entirety of the shortfall was attributed to weaker iPhone demand in Greater China, while other regions and non-iPhone segments are faring better than expectations. In fact, non-iPhone segments combined to grow nearly 19 per cent year-over-year.

CEO Tim Cook pointed to a softer economic environment in China combined with rising trade tensions between China and the US as key explanations, and we also sense Chinese nationalism in the form of shunning prominent US products (such as the iPhone) played a major role.

Overall, we are maintaining our US$200 fair value estimate, as cuts to our China iPhone forecasts are offset by stronger services and wearables expectations, and we see an adequate margin of safety as Apple's growth trajectory lies with its ability to better monetise its installed base, rather than grow iPhone units in a largely saturated smartphone market.