Apple Profits Fall For First Time In 10 Years
Apple has reported its first fall in profits for nearly 10 years - a move that could further threaten its market value.
Analysts expected a tumble of up to 18% in earnings when the company delivered its second quarter trading statement on Tuesday.
In the end, the technology giant announced that its profits for the second quarter of the financial year - the three months to the end of March 2013 - were down £1.38bn ($2.1bn) to £6.27bn ($9.56bn), which was what analysts had predicted.
Soon after announcing the profit fall, the Apple board cleared the way to buy back $100bn worth of shares by 2015.
It is rumoured that higher component prices and the lower costs of some of its products were what ate into Apple's profit margins.
There has also been stronger competition in the smartphone and tablet markets.
Weaker demand - largely because of the competition issue - has been blamed for the 40% drop in Apple's stock value since September last year.
But Apple reported strong growth in the sales of many of its products.
The company sold 37.4 million iPhones in the quarter, compared with 35.1 million in the same quarter the year before.
It sold 19.5 million iPads compared with 11.8 million in the previous year. Sales of Macs were down, too.
Apple did its best to make light of the profits fall.
CEO Tim Cook, who took over when Steve Jobs died of cancer in 2011, said: "We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad.
"Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline."
Apple shares fell below the $400 (£262) mark last week for the first time since December 2011.
Despite the fall, the markets responded positively, buoyed by the fact that the results were not worse than expected and off the back of the sales results.
Apple leapt 5.5% in after-hours trading, also boosted by the buy-back plan.
The US firm's forecast had added to market speculation that sales of the iPhone - which make up more than half of Apple's revenue - are slowing more quickly than expected as Samsung and other rivals flood the market with cheaper devices.
A cloud was lifted from the iPhone on Monday night when the US International Trade Commission threw out a Motorola Mobility patent claim that threatened to block the import of some iPhone models into the US.
The commission dismissed a complaint by the Google-owned firm which accused Apple of infringing technology that makes touch screens ignore fingers when people are holding smartphones to their ears for calls.