Apple is starting off the new year by tempering expectations. Tim Cook released a letter to Apple investors on Wednesday to announce the company is changing its guidance for the first fiscal quarter of 2019.

The new guidance cuts Apple’s expected revenue to $84 billion, down from the estimated figure Apple revealed in November 2018 of about $93 billion. 

Apple also pegged gross margin to be at 38-percent and operating expenses to be $8.7 billion.

In the letter, Tim Cook offers a number of reasons for revised expectations, among which is “fewer iPhone upgrades” than the company anticipated. That’s been a big source of discussion as multiple reports state Apple’s iPhone sales haven’t reached the level it anticipated with the introduction of the iPhone XS, XS Max and XR.

The chatter only intensified when Apple began to heavily promote the iPhone XR with big discounts, something it rarely does for new iPhone models.

During the height of iPhone popularity, it was hard to imagine Apple’s massively popular smartphone ever seeing a steep decline. But that decline seems to have arrived and it appears to have caught Apple by surprise given the revised expectations for the beginning of the new year.