Yesterday (26 April) analysts forecast the first ever quarterly decline in iPhone sales on a year-over-year basis. Overall expectations for Apple (NASDAQ:AAPL) earnings were bleak. Analysts' predictions were realised - and stock fell by 8%.

This quarter marks Apple's first quarterly sales drop in 13 years.

The company posted quarterly revenue of US$50.6bn (£34.7bn,) 13% down year-over-year; and quarterly net income of US$10.5bn (£7.2bn) 23% down year-over-year; or US$1.90 (£1.30) per diluted share, 19% down year-over-year.

Gross margin was 39.4% compared to 40.8% in the year-ago quarter. International sales accounted for 67% of the quarter’s revenue.

“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s CEO. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”

iPad sales fell by 19%, iPhone sales are down 16%  – indicating a saturated market and increasing competition.

iPhone sales: 51.19 million, for $32.86bn (£22.54bn) in revenue
iPad: 10.25M, for $4.41bn (£2.84bn)
Mac: 4.03M, for $5.1bn (£3.5bn)

Apple Watch and Apple Pay continue to grow.

Damon Combrinck, global digital advertising operations director, iProspect said: “As predicted, iPhone sales have fallen significantly with other product lines such as the iPad not seeing frequent upgrades, and the Apple Watch having failed to endear consumers to the wearables market as some experts had expected. A focus on bettering the App Store and Apple’s services business is one way to off-set this, but it’s likely that we’ll see Apple looking to new product lines. Tim Cook will likely be hoping that the SE, its new “budget” handset, will bring on new customers this year, though that remains to be seen. Advertisers will likely be hoping that the focus is on VR and AI however, as Apple moving into these markets could bring it to the mainstream and create new opportunities for brands.”