In its latest results, Apple has reported that it sold fewer iPhones in the first three months of 2017.
Apple's IPhone Sales Drop in First Quarter of 2017
Leading tech giant Apple Inc., which is set to release its latest smartphone later in the year has said it sold 50.8 million iPhones in the first quarter of 2017, a 1% year on year decline.
According to Apple chief Tim Cook, the surprising drop in sales could be attributed to the fact that customers had paused purchasing phones as they wait for the latest iPhone.
After hours trading saw shares of the California firm fall by 2% after reaching an all-time high earlier, as markets anticipated better results.
Apple saw a 4.6% increase in revenue to $52.9bn, which was still slightly lower than analysts had predicted.
However, impressive performance in services including the App store and iCloud helped to offset the drop in iPhone sales.
Mr. Cook said the increase in sales of AirPods, Apple Watch and Beats earphone was also commendable.
Although unit sales fell, revenue from Apple phones still increased 1% to $33.2bn, which can be attributed to the massive sale of the iPhone 7 Plus, which is bigger and more expensive.
For Apple, this time of the year is always the least impressive in terms of earning, as it follows the Christmas period.
Investors have been quite disappointed by the worse than expected sales of iPhones but Mr. Cook tried to reassure them that Apple’s health was intact with the continued growth of services such as iTunes, Apple TV and others.
However, observers insist that the rest of the year will be exciting to watch in terms of Apple’s performance.
According to analysts at Global Data Retail, revenue from iPhone sales was $7bn less than the same period two years ago.
In a note, Neil Saunders of Global Data Retail noted, “We highlight this data not to be unnecessarily harsh to Apple but to show that the company has only partly come out of the slump it was in the last fiscal year.”
He added, “In our opinion, the company’s mature product portfolio and absence of any significant new products is an indication that it has struggled to regain lost ground.”
Last year, China was partly blamed for the slump and the case is the same this year. Revenue from sales in China fell 14%, but Mr. Cook said currency fluctuations are to blame for the fall.
Tim Coulling, a Canalys senior analyst said the smartphone market in China is extremely competitive and offers cheaper products with similar specifications to Apple.
He added that going forward it would be difficult to create something truly new and revolutionary.
In its report, Apple said quarterly global profits were $11bn worldwide, a 4.9% increase from the same period in 2016.
The tech company also said it planned to return an additional $50bn to shareholders.
Apple's cash holdings have increased to an all-time high of $256.8bn and the firm is increasingly under pressure to disclose how it plans to use the money.