The slowdown comes as Wall Street analysts worry the company does not have another blockbuster product to replace the iPhone.
Apple does not report Watch sales, but it does not appear to have the makings of being a hit on the same level as the iPhone a year after launch.
And while the company is reportedly working on a car, what it plans to do in that area and when are still unclear.
The company’s shares, which have fallen 5 per cent this year, bounced around in after-hours trading and were down more than 2.6 per cent.
“It’s disappointing to see them miss on an already downward adjusted sales number and the fact is that with their iPhone growth slowing what was needed was a product to be excited about,” said JJ Kinahan, chief strategist at TD Ameritrade. “Pressure on the shares will continue without a well-defined plan to grow sales or a new product.”
The company said on Tuesday it sold 74.8 million iPhones in its fiscal first quarter ended December 26, the first full quarter of sales of the iPhone 6S and 6S Plus. The 0.4 per cent growth in shipments was the lowest since the product was launched in 2007.
IPhone sales were expected to fall for the current quarter compared with the same quarter last year, chief executive officer Tim Cook said on a conference call with analysts on Tuesday.
But suggesting there is still room for growth, 60 per cent of people who had an iPhone prior to the launch of the iPhone 6 have yet to upgrade to an iPhone 6 or 6S, Cook said.
While revenue in Greater China rose 14 per cent in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Apple chief financial officer Luca Maestri told Reuters in an interview.
Apple forecast second-quarter revenue of $US50 billion ($A71.30 billion) to $US53 billion, below analysts’ average forecast of $US55.5 billion. In the same quarter last year Apple reported revenue of $US58 billion.
Apple’s guidance for the March quarter implies iPhone sales of 50 million to 52 million units in the March quarter, which would mark the company’s first-ever decline in sales of the gadget, said analyst Daniel Ives of FBR Capital Markets & Co.
In the same quarter last year Apple sold 61.2 million iPhones.
The company reported revenue of $US18.37 billion from Greater China, accounting for 24.2 per cent of total revenue. Revenue from the region had nearly doubled in the fourth quarter.
Apple reported earnings of $US3.28 per share, beating the average analyst estimate of $US3.23 per share, according to Thomson Reuters I/B/E/S. Revenue increased 1.7 per cent to $US75.87 billion, both records for the company.
Analysts had expected revenue of $US76.54 billion.
Apple’s overall performance was “slightly better than feared”, said Ives at FBR.
And despite the slowdown, Apple remains the most profitable company in the S&P 500 and the most valuable publicly traded US tech company.
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