Apple reports slowest iPhone sales since 2007 launch

Over the longer term, he said, revenue from apps and services, along with new products like the Apple Watch, “will be critical as the company attempts to re-ignite growth”.

The $75.9 billion in revenue for the company’s fiscal 2016 first quarter, which ended December 26, is up 2 percent from $74.6 billion in the same quarter one year ago, while the company’s net income of $18.4 billion, which set another quarterly record, rose from $18 billion one year ago. Earnings amounted to $3.28 a share, which beat the $3.23 average forecast among analysts surveyed by FactSet.

Apple did reveal that 1 billion devices (across all of its products, not just iOS products, including Mac PCs and Apple TV) have been connected to its services in the last 90 days.

Revenue in “Greater China” was up 14% for Apple but weaker in the USA and Japan. Apple’s iPhone shipments in the first quarter fell short of market expectations of 75.5 million, according to research house FactSetStreetAccount.

In its quarterly earnings report, Apple said it sold 74.8 million iPhones in the last three months, just 1 percent more than it did in 2014 when it sold 74.5 million phones.

Luca Maestri, chief financial officer, said in the call that Apple has increased the price of its products in some worldwide markets to cope with the volatility, but recognized higher prices will eventually hurt demand.

While Cook remains optimistic for now, Apple is forecasting a sales decline for the first time in more than a decade. Apple sold a record 74.8 million iPhones during the quarter, which includes the busy holiday shopping season, up only 300,000 units from 74.5 million a year earlier. Android, by comparison, saw its share of U.S. smartphone users rise to 51.7% in 2015, up from 51.3% the previous year. In a report this week, analyst Colin Gillis of BGC Financial warned that “the big issue for Apple” is whether the company can garner significant amounts of revenue from those new products.

Apple posted record iPhone sales in the last quarter – barely. Piper Jaffray analyst Gene Munster estimates that the revenue projections imply iPhone sales of around 50 million to 52 million iPhones for the March quarter.

Apple shares have slid 20 per cent since past year on these concerns.

The company also returned $9 billion to shareholders through dividends and stock buyback. But Apple still has “some more wood to chop over the coming quarters to give investors further confidence” that iPhone sales will pick up again.

“You need to take into account the business opportunities that we have, but also the realities of an economic environment that is not ideal right now”.