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Apple sees surprise fall in iPhone sales Apple sees surprise fall in iPhone sales
(about 3 hours later)
Apple sold fewer iPhones than a year ago in the first three months of 2017, the company said in its latest results.Apple sold fewer iPhones than a year ago in the first three months of 2017, the company said in its latest results.
The California company, which is due to release a new phone later this year, said it sold 50.8 million iPhones in the period, down 1% year-on-year. The California firm, which is due to release a new phone later this year, said it sold 50.8 million iPhones in the period, down 1% year-on-year.
Apple reported a 4.6% rise in revenue across the whole company, slightly below analysts' expectations. Apple boss Tim Cook blamed a "pause" as customers wait for the next iPhone.
Shares in the firm fell nearly 2% in after-hours trading after earlier hitting a record high. Shares in the firm fell nearly 2% in after-hours trading after earlier hitting a record high on expectations of better results.
Apple said quarterly profits were $11bn (£8.5bn), up 4.9% from the same period in 2016. Apple reported a 4.6% rise in revenue across the whole company to $52.9bn (£41bn), slightly below analysts' forecasts.
Despite falling unit sales, revenue from the iPhone still climbed 1% to $33.2bn as it sold more of the bigger, more expensive iPhone 7 Plus. 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 $7bn.
Analysis: Dave Lee, BBC North America technology reporter Mr Cook also pointed to growth in sales of Apple Watch, as well as its AirPods and Beats earphones.
This is always the least impressive time of year for Apple's earnings, come as it does after the Christmas period. But worse-than-expected iPhone sales had investors slightly unhappy after anticipation of strong earnings sent shares to record highs earlier on Tuesday. Despite falling unit sales, revenue from iPhones still climbed 1% to $33.2bn due to "robust" sales of its bigger, more expensive iPhone 7 Plus.
That said, revenues are up, in part because of "robust" sales of the iPhone 7 Plus, the bigger, pricier model. Analysis: Expectations high for 10th anniversary iPhone
By Dave Lee, BBC North America technology reporter
This is always the least impressive time of year for Apple's earnings, come as it does after the Christmas period.
But worse-than-expected iPhone sales had investors slightly unhappy after anticipation of strong earnings sent shares to record highs earlier on Tuesday.
Tim Cook told investors he was also pleased with the continued growth of its Services division - that's things like Apple Music, Apple TV, iTunes and so on - but the health of Apple is only realistically measured with the success of that all-conquering smartphone.Tim Cook told investors he was also pleased with the continued growth of its Services division - that's things like Apple Music, Apple TV, iTunes and so on - but the health of Apple is only realistically measured with the success of that all-conquering smartphone.
Which is why the rest of the year will be exciting to watch.Which is why the rest of the year will be exciting to watch.
With the iPhone's 10th anniversary upon us, expectations are high for the next device.With the iPhone's 10th anniversary upon us, expectations are high for the next device.
Anything short of a major improvement would be troubling for investors who are banking on the next iPhone being a blockbuster, not an incremental upgrade.Anything short of a major improvement would be troubling for investors who are banking on the next iPhone being a blockbuster, not an incremental upgrade.
Analysts at GlobalData Retail noted that Apple's revenue from iPhones was $7bn less than the same period two years ago.
"We highlight these facts not to be unduly harsh to Apple, but to indicate that the company has only partially emerged from the slump that hit it over the last fiscal year," Neil Saunders, managing director of GlobalData Retail, wrote in a note.
"In our view, the company's mature product line up and an absence of any significant new devices mean it has struggled to regain all of the lost ground," he added.
China, which was partly to blame for the slowdown last year, was again difficult for Apple. Revenue from China dropped 14%, although Mr Cook partly blamed currency fluctuations for the fall.
Apple said quarterly profits were $11bn worldwide, up 4.9% from the same period in 2016.
The firm also announced it would return an extra $50bn to shareholders.