iPhone sales dropped in the first three months of 2017 than a year ago, Apple said in its latest results.
Apple, which is due to release a new phone later this year, said it sold 50.8 million iPhones in the Q1 of 2017, down 1% year-on-year.
The company’s CEO Tim Cook blamed a “pause” as customers wait for the next iPhone.
Apple shares fell nearly 2% in after-hours trading after earlier hitting a record high on expectations of better results.
The company reported a 4.6% rise in revenue across the whole company to $52.9 billion, slightly below analysts’ forecasts.
The dip in iPhone sales was offset by services, including Apple Pay, iCloud and the App store, which recorded an 18% increase in sales to $7 billion.
Tim Cook also pointed to growth in sales of Apple Watch, as well as its AirPods and Beats earphones.
Despite falling unit sales, revenue from iPhones still climbed 1% to $33.2 billion due to “robust” sales of its bigger, more expensive iPhone 7 Plus.
China, which was partly to blame for the slowdown in 2016, was again difficult for Apple. Revenue from China dropped 14%, although Tim Cook partly blamed currency fluctuations for the fall.
Apple said quarterly profits were $11 billion worldwide, up 4.9% from the same period in 2016.
The company also announced it would return an extra $50 billion to shareholders.
Apple’s cash holdings have risen to a record $256.8 billion and the company has come under increasing pressure to disclose its plans for the money.
Apple has reported falling of iPhone sales and revenue for the third quarter in a row, but sales beat analyst expectations.
It sold 45.51 million iPhones in the three months to September 24, beating an average estimate of 44.8 million.
The company also forecast higher-than-expected holiday season revenue of between $76 billion and $78 billion.
But revenue in Q4 fell 9% to $46.85 billion.
That meant annual revenue fell for the first time since 2001, highlighting a slowdown in the smartphone market as well as intensifying competition, particularly from Chinese rivals.
Apple executives said demand for the new iPhone 7 was strong, despite fiscal fourth-quarter revenue falls in China and the Americas, its two most important markets.
Revenue from Greater China, once seen as Apple’s next growth hope, fell 30% in the quarter, after dropping 33% in the previous quarter.
In the same period last year, revenue from Greater China doubled.
Apple’s shares were down 3% at about $114.80 in after-hours trading.
Net income fell to $9.01 billion in the fourth quarter, down from $11 billion in the same quarter in 2015.
For the year, net income fell to $45.7 billion from $53.4 billion.
Apple CFO Luca Maestri said it was “impossible to know” if there was any effect yet from rival Samsung halting production of Galaxy Note 7 phones earlier this month.
Tech giant Apple has reported the slowest growth in iPhone sales since the product’s 2007 launch.
It also warned iPhone sales will fall for the first time later this year.
Apple sold 74.8 million iPhones in its fiscal first quarter, compared with 74.5 million a year ago.
The company said revenue for the next quarter would be between $50 billion (€46 billion) and $53 billion, below the $58 billion it reported for the same period a year ago.
This would mark Apple’s first fall in revenues since it launched the iPhone.
Despite first-quarter iPhone sales being below the 75 million expected by analysts, it was still a record quarter for the company.
Apple revenue in the three months to December 26 was $75.9 billion and net profit was $18.4 billion, both of which are the highest ever recorded by the company.
Sales of iPhones accounted for 68% of the company’s revenue in the period.
Photo AP
Apple CEO Tim Cook credited “all-time record sales of iPhone, Apple Watch and Apple TV” for the performance.
However, CFO Luca Maestri said the company was operating in “a very difficult macroeconomic environment”.
He added that “iPhone units will decline in the quarter” and that Apple was not projecting beyond those three months.
Luca Maestri partly blamed the strong US dollar for Apple’s flat sales, estimating it had knocked $5 billion off the company’s revenues.
Apple’s sales in Greater China – defined by the company as China, Hong Kong and Taiwan – rose 14%, but that was much slower than the 70% increase a year ago.
Luca Maestri said the softness in China was “something that we have not seen before”, Reuters reported.
China accounts for almost a quarter of Apple’s sales, more than all of Europe combined.
The profitability of Apple’s business improved, with gross margin – or how much the company makes per product – increasing to 40.1%.
Speaking to analysts, Tim Cook said Apple had “the mother of all balance sheets” and that its financial position had never been stronger.
Apple’s shares were down 2.7% in after hours trading at $97.28.
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