Apple is predicting its first decline in 13 years.
While the tech giant posted record results for final quarter sales in 2015 on Tuesday, it said growth in iPhone sales had been at their slowest since the launch of the device in 2007.
The San Francisco-based company expects that sales in the current quarter are likely to fall year-on-year, with iPhone sales declining for the first time.
For the three months to the end of March, Apple is forecasting sales between £35-£37bn which would be down on the £40bn down on the same period in the previous year. If accurate, this would be the first revenue decline since Q1 2003, just over a year after the first iPod was released.
Growth in iPhone sales was 46% a year ago, but was at a mere 0.4% in the trading update.
Apple, which is the world’s most valuable company by market share and sales, has not reported a fall in iPhone sales before but it’s understood that investors have feared a slowdown after the huge success of the last decade.
Because the iPhone is a dominant product, its sales dwarf the success or failure of any other product that Apple has released.
iPad tablet sales have been falling for almost two years and were down from 21.4m to 16.1m, despite the release of the iPad Pro, a larger tablet targeted at corporate customers.
Cook said that 1bn Apple devices are now being used around the world, a quarter more than were being used a year ago, but that the market had not peaked. "There are a lot of people in the world who will buy smartphones and we ought to be able to win our fair share of those," he said.