CEO Tim Cook told CNBC's Josh Lipton on Wednesday the shortfall is "100 percent from iPhone, and it's primarily in China."
"It's clear that the economy began to slow there for the second half, and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy," Cook said.
Ives said the China demand story over the next few quarters will be the focus going forward for Apple.
"The degree of softness that we're seeing in China is a bit of a jaw-dropper," he said on "Closing Bell."
However, right now he views this as "the sum of the parts."
While he expects Wall Street analysts to bring their targets for the stock down in the near term, there are questions about what could happen in the future.
"It comes down to: Are they going to cut prices? Is this a two- or three-quarter massive downtick that we're seeing and then we start to see better pricing in terms of 2019? In that case, the installed base [total current users] and the iPhone story continues to be there," he said.
It all comes down to how Apple takes things from here.
"This, in my opinion, for Cook will be a defining period, how he and the company handle it specifically around metrics and China demand."