Sales of iPhone fall to three-year low as Apple’s popularity drops in China

Sales of the iPhone have fallen to the lowest level for three years after Apple’s popularity dropped in China and as shoppers wait for new models.

Apple recorded an 1pc drop in quarterly iPhone revenues on Thursday night to $39.3bn (£30.9bn), the lowest figure since 2021.

While a small drop, it means Apple has recorded consecutive quarters of falling iPhone sales for the first time in five years.

The figures were slightly better than forecast, leading shares in the tech giant to climb slightly.

Apple’s overall revenues rose by 5pc to $85.8bn. Profits were up 8pc at $21.5bn.

However, the company saw another sales drop in China, where it has struggled in recent months as local rival Huawei has overcome US microchip sanctions to launch new high-end phones.

It has resorted to deep discounting to boost sales, but dropped out of the top five biggest smartphone makers in China in the second quarter of the year.

Sales in China fell 6.5pc, the fourth drop in a row.

Overall, however, Apple’s sales returned to growth due to the success of new iPad models and the continued growth of services such as the App Store and Apple TV Plus.

iPad sales were up 24pc to $7.2bn, while Mac computer sales climbed slightly. Its digital services unit grew by 14pc to sales of $24.2bn.

The iPhone remains by far Apple’s biggest source of revenue but sales have wavered in recent years in the absence of any major design breakthroughs.

The company is expected to release a new wave of handsets next month that are powerful enough to take advantage of its latest artificial intelligence features.

Apple released the Vision Pro, the company’s £3,500 virtual reality headset, earlier this year with the device recently going on sale in the UK.

However, it has been met with a tepid response from both shoppers and critics. Apple has reportedly cut sales forecasts for the device.

It came as Amazon shares fell despite the company doubling its profit as it predicted a slowdown in sales growth.

The online retail giant said revenue in the second quarter of the year rose by 10.1pc to $148bn, while profits were up from $6.8bn to $13.5bn.

However, it predicted that sales would grow by around 9.5pc in the next quarter, which would be its slowest for more than a year.

Shares fell by around 4pc immediately after the results.

The company is facing threats from fast-growing rivals Shein and Temu, and has been seen as something of a laggard in artificial intelligence compared to its Big Tech rivals.

Amazon is poised to start shipping products directly from China for the first time in a bid to compete with the country’s sellers, which have undercut it on price.

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