Apple suffers biggest iPhone sales slump in three years

Apple has suffered its biggest drop in iPhone sales for more than three years as Chinese shoppers turn away from the company and embrace domestic rivals such as Huawei.

The Californian tech giant said on Thursday night that revenues from the iPhone fell by 10.5pc in the first three months of the year.

Total sales fell by 4pc to $90.8bn (£72.4bn), while profits were down 2pc to $23.6bn. Shares rose in after-hours trading however, with the sales decline not as severe as feared. Sales from China fell by 8pc.

Apple has endured a 9pc drop in its shares this year, missing out on a wider artificial intelligence (AI)-driven technology boom, and lost its position as the world’s most valuable listed company to Microsoft.

The drop has largely been driven by fears about China amid competition from a resurgent Huawei, which has overcome US sanctions to develop its own microchips. Sales have also been hit by Chinese government orders for workers not to bring devices from foreign companies to work.

The last time the company reported a double-digit decline in iPhone sales was in 2020, when the delayed release of new devices because of the pandemic led to a 21pc drop in demand.

Apple has now reported falling overall sales for five of the last six quarters, while sales in China have dropped for three consecutive quarters.

The iPhone makes up the majority of Apple’s revenues despite chief executive Tim Cook’s attempts to grow other parts of the business. Analysts estimate that the company lost its status as the world’s top smartphone maker in the first quarter of the year to Korean giant Samsung.

Revenues from Apple’s services business, which includes the App Store and services like Apple Music, rose 14pc. iPad sales were down 16pc while those of Mac computers rose slightly. Its accessories business, which includes the Apple Watch and AirPod headphones, saw a fall in sales.

The figures did not show a noticeable impact from the launch of the Vision Pro, Apple’s new virtual reality headset, which is seen as the biggest new product of chief executive Tim Cook’s 13 years in charge of the company.

Apple released the $3,500 headset in February but reports have suggested weaker-than-expected demand to date.

Mr Cook said: “As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us.” 

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