Apple says more than one billion active devices worldwide

The news was preceded by weeks of dark predictions, with media reports claiming Apple had cut manufacturing orders from the companies that build the iPhone because inventory of the smartphone was backing up in retail channels.

However, since the Apple Watch and Apple TV are grouped in Apple’s “Other” category while reporting its financial results, the exact quarterly sales figures for the two devices have not been separately disclosed by the company. Investors have feared that consumers have not taken to the latest iPhone models as they have to previous devices, leading to shares falling by a fifth in the last six months.

Apple is used to being the overachieving popular kid in Silicon Valley, but the iPhone maker is about to face its most hard quarter since the first iPhone was announced, after the company forecast a decline in sales. But the second quarter has shown a stutter in iPhone sales, and this has happened for the very first time.

“We sold 74.8 million iPhones in the December quarter, an all-time high”. Apple is predicting revenues of $50-53bn, below its Q2 2015 revenues of $58bn – the first year-on-year drop in revenues recorded by the company for 13 years.

Mac and iPad sales were also weaker than expected, tablets sold 16.1 units in the quarter compared to an expected 17.93 million.

It might lie in services, which include all those things you buy after you buy an iPhone, iPad, Mac computer or even an Apple Watch and Apple TV.

The profitableness of Apple’s business enhanced, with gross margin – or how much the firm makes per merchandise – rising to 40.1%.

Apple Chief Executive Tim Cook said he is bullish on prospects in China and the company will continue to increase investment in the market.

Even so, Apple is touting this stat as a reason why its services business – music included – remains undervalued. It generated a whopping fourth-quarter profit of $18.4 billion, a 2 percent increase from a year earlier, and a staggering $216 billion in cash. Worldwide sales accounted for 66 percent of the quarter’s revenue.