Apple records unexpected drop in iPhone sales

Are customers waiting for the iPhone 8?

Apple's iPhone sales fell year-on-year, with the upcoming release of the iPhone 8 possibly to blame.

The tech giant's iPhone shipments dropped 1% for the first three months of 2017 compared to the same period last year, selling50.8 million units compared to51 million in 2016.

Despite this, Apple recorded more revenue for Q2 2017 - with $33 billion earned compared to $32.8 billion the previous year. Apple CEO Tim Cook pointed to sales of the more expensive iPhone 7 Plus for this increase, saying: "We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus."

But Clement Thibault, senior analyst at Investing.com, told the Guardianthat the new and improved iPhone 8 - likely to be a more significant upgrade for the device's 10th anniversary - might have stopped some users from buying the iPhone 7, waiting for the more impressive version.

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He said:"This is a very mixed report for Apple in terms of results. Apple sold less iPhones than it did a year ago, but the possibility of consumers holding out until the new iPhone release is very real, especially when the upgrade is rumored to be more meaningful than in previous years," said.

Elsewhere, iPad sales were down by 13%, with Apple selling 8.9 million units for $3.9 billion this quarter compared to 10.3 billion units for $4.4 billion the same time last year.

It recorded a 4% increase in Mac sales, rising from 4 million for $5 billion to 4.2 million for $5.8 billion. Other services such as Digital Content and Services, AppleCare, Apple Pay earned $7 billion, which comprised 18% of revenue.

The company reported a 4.6% year-on-year rise in revenue across the whole company to $52.9 billion. Cook said:"We've seen great customer response to both models of the new iPhone 7 Red Special Edition and we're thrilled with the strong momentum of our services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference next month in San Jose."

The company predicts that in the third quarter it will earn revenue between $43.5 billion and $45.5 billion.

This follows last quarter's report which saw Apple post quarterly revenue of $78.4 billion and profit of just under $18 billion, thanks to record sales for the iPhone, Watch, Mac and Services, while the App Store posted its best month ever in December with $3 billion in purchases, Cook said.

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