Apple warns iPhone sales to drop for the first time ever

Apple on Tuesday reported the slowest growth ever of its iconic iPhone, leading the gadget maker to brace for a decline in smartphone sales in the current quarter, the first in its history.

As a result, Apple's revenue could fall at least 8.6 percent during the January-March quarter - and if that happens, it would be the company's first such decline in 13 years.

"We do think that iPhone units will decline in the quarter," chief executive Tim Cook said during an earnings call with analysts.

But Apple said the decline is nothing more than a hiccup, and that it is working to broaden its product options.

"We have become more and more of a platform company," said Chief Financial Officer Luca Maestri, adding that there are more than 1 billion Apple devices currently in use.

That massive customer base can be relied on, he said, to purchase new Apple products - not only hand-held and wearable devices and computers but also mobile apps and other services such as Apple music.

The news that Apple won't match its January-March 2015 sales of 61 million iPhones comes just after the firm closed out the year with a record-setting quarter. Their fourth-quarter iPhone sales surpassed their previous record of 74.5 million sales - set during the last quarter of 2014 - by a fractionally higher 300,000.

The company's shares have been in decline recently as investors worried that the company could not maintain its record setting sales pace, and Apple's announcement confirmed those fears.

"We're seeing extreme conditions, unlike anything we've experienced before, just about everywhere we look," Cook said.

Hurt by China

A strong dollar is hurting profit margins on overseas sales, as is China's rapidly cooling economy. The Asian behemoth is one of Apple's biggest markets.

Still the tech giant has no financial worries. It generated a whopping fourth-quarter profit of $18.4 billion (16.9 billion euros), a 2 percent increase from a year earlier, and a staggering $216 billion in cash.

Cook called it "the mother of all balance sheets."

Profits rose 1.8 percent year-on-year, while revenue increased 1.7 percent to $75.9 billion. That, however, fell short of analysts expectations, which had forecast $76.7 billion in revenues.

But earnings amounted to $3.28 a share, which beat analysts expectations by a nickel.

To illustrate how the iPhones dominates Apple#s sales, the firm reported sales of "other products" - including the smartwatch and Beats music products - were $4.35 billion in the last quarter of 2015, but did not break down those figures. Services accounted for $6 billion.

Sales of iPads plunged precipitously - a 56 percent drop in revenues and 25 percent fall in unit sales as the market for tablets cooled.

bik/jr (AP, AFP)