Apple fails to meet expectations

The calm before the iPhone 8 takes the world by storm?

Apple has reported a fall in iPhone sales for the second quarter.

Consumers bought 50.76 million of the devices in the three months to the end of March. That's down by about 430,000 on the same period last year and about 1% below expectations.

Shares in Apple have soared by 14% this year to date, closing at an all-time high of $147.50 on Tuesday, but they slipped by 2% in after hours trading last night after the company announced the lower than expected sales.

The share price turned down despite a higher than expected 10% increase in earnings to $2.11 per share and overall revenues, more or less in line of close to $53bn during the quarter. The tumble was also despite Apple’s decision to distribute an additional $50bn of its surplus capital to shareholders via another special dividend.

Sales at higher unit prices – particularly of the iPhone 7 Plus – grew strongly in many parts of the world, including Europe. Total revenues from China and Hong Kong, however, fell by 14%.

Apple chief executive Tim Cook blamed leaks about the next iPhone model, due out in September and marking the 10th anniversary of the device’s first launch, on the sales lull.

Cook said the "pause" in purchasing owed to "earlier and much more frequent reports about future iPhones".

Speaking to CNBC, Cook outlined the company's plan to double the revenue of its services business by 2020. The segment took in over $7bn in revenue for the quarter.

He said of its fastest-growing business segment:

"In services, the App Store was up 40 percent, and our developer community is growing by over 20%.

"There is a lot of momentum."

"If you add up the number of subscriptions across Apple-branded services and third-party, we have over 165 million paid subscriptions."

Cook added:

"We are on target to hit the first milestone for it to be the size of a Fortune 100 company."