Apple disappoints Wall Street with drop in revenues and iPhone sales

It's been on the cards for a while thanks to decreasing iPhone sales admist a consumer preference for more affordable smartphones, and now it is official.

Apple has released its most recent financial figures for the quarter running up until the end of March, revealing a drop in revenue for the first time in 13 years and a drop in iPhone sales for the first time ever since it was launched by Steve Jobs in 2007.

The Cupertino-based company reported revenues of $50.6 billion - down 13 per cent from the $58 billion reported in the same period in 2015 - and sold 51.19 million iPhones, equating to a 16.3 per cent year on year decrease from 61.17 million units. Revenue figures fell short of Wall Street projections - which was predicted to be $52 billion - with shares falling 6 per cent in after-hours trading.

Interestingly, the number of iPhones sold actually exceeded predictions, but earnings from the devices fell short due to customers opting for cheaper models such as the newly releases iPhone SE, meaning the average selling price decreased to $641 compared to analysts' expectations of $658.

Although it can still claim to be the most valuable company in the world, it seems the bubble may have finally burst for Apple, with the plethora of high-quality, mid-range devices in the market turning customers away from the more costly iPhones.

Patrick Moorhead, an analyst at Moor Insights & Strategy, said: "Apple is going to be put in a position, in a defensive position of how they show growth, and this is an area that Apple has not had to do for the last few years."

Image source: Shutterstock/Helder Almeida