Apple boss Tim Cook has hinted it could lower iPhone prices outside the US in an attempt to boost falling sales.
Revenue from the iPhone, responsible for most of the firm’s profits, fell 15% in its latest financial quarter.
Overall the firm’s revenue was down 5% from a year ago to about $84.3bn (£64.5bn).
The slowdown had been expected after the tech giant warned investors earlier this month that revenue would be about $84bn, lower than expected.
The firm had blamed the issues partly on an economic slowdown in China.
But chief executive Tim Cook said customers were are also struggling with the firm’s high prices.
He said a strong dollar, which makes its products comparatively more expensive, has hurt its performance in emerging markets.
Mr Cook suggested the tech giant may switch to pricing its phones in local currencies instead of US dollars.
“As we’ve gotten into January and assessed the macroeconomic condition in some of those markets we’ve decided to go back to more commensurate with what our local prices were a year ago in hopes of helping the sales in those areas,” he told Reuters.
Still, executives said they expected the firm’s challenges to continue.
Apple predicted revenue in the three months to 31 March of $55bn-$59bn – suggesting a drop of at least 3.4% year-on-year.
“The macroeconomic environment, particularly in emerging markets, will continue to be there,” Luca Maestri, the firm’s chief financial officer, said.
Apple’s struggles are not unique. Global smart phone shipments contracted 5% in 2018, according to Canalys, a market analyst firm.
But the firm’s share price has dropped by around one third since October, amid investor concerns that buyer appetite for iPhones is weakening.
Fears intensified after the firm said it would stop reporting the number of iPhones, iPads and Macs it sold each quarter.
However, Apple shares gained more than 4% in after-hours trade on Tuesday, as the firm proved more resilient than expected.
Quarterly sales revenue dropped by more than 25% in its Greater China region, which includes Hong Kong and Taiwan, compared to the year before.
Sales also slipped about 3% year-on-year in Europe.
But in the Americas – the firm’s single biggest region – sales were up almost 5%.
Revenue from the services business also jumped 19% to a record $10.9bn in the quarter, which ended on the 31 December.
Mr Cook said he remained confident in the business, pointing to strong sales of iPad and Macs, as well as growth in its services division, which includes Apple Pay.
Overall profit in the quarter fell less than 1% to $19.97bn.
“While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide,” he said.