Apple announced its fiscal 2013 second quarter results yesterday, which saw a net profit of $9.5bn (£6.2bn), a fall from the $11.6bn (£7.5bn) net profit in the same quarter last year.
But while profits have fallen for the first time in a decade, Apple reported strong sales of its devices. It sold 37.4 million iPhones compared to 35.1 million in the same quarter last year, and sold 7.7 million more iPads than the second quarter of 2012 (19.5 million compared with 11.8 million). This led to the firm boasting a quarterly revenue of $43.6bn (£28.5bn), compared with $39.2bn (£25.6bn) in the same quarter last year.
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But increased competition in the smartphone and tablet categories, particularly with Samsung's Galaxy smartphone range and a host of different tablet makers, has left Apple's share price reeling.
Apple reached a high of $702 per share on 19 September 2012; at the time of writing it is $406.
Tim Cook, chief executive of Apple, said the decline in the company's share price is "very frustrating". He stated that Apple cannot control exchange rates, world economies and cost pressures.
"Though we've achieved a credible scale and financial success, we acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012," Cook said.
The company plans to buy back $60bn (£39.2bn) in shares, and raise its dividend by 15 per cent to $3.05.
Jan Dawson, chief telecoms analyst at Ovum, believes this is unlikely to solve what he thinks is an underlying problem with the share price.
"[The problem] is more due to scepticism among analysts that Apple can continue to deliver strong growth without new products to complement sales of iPhones and iPads. As iPad and iPhone shipments, and especially revenues, grow more slowly, it needs new products to continue to deliver the sort of overall revenue growth it has historically produced, and it is not yet clear what those new products will be," he said.
Dawson pointed to average selling prices for iPhones and iPads falling, but Apple revenue climbing as a result of growth in sales of lower-priced models like the iPhone 4 and 4S, and the iPad Mini.
"That's a sign of things to come, as Apple has to pursue secondary markets for both of these products as primary markets become saturated, and that in turn will have an impact on margins," he said.
The company sold just under four million Macs last quarter, a similar figure to the four million sold in the second quarter of 2012. Dawson believes this has come because of Apple's "halo effect".
"At a time when other PC makers are really struggling with falling sales, Apple maintained consistent sales year on year, and increased average selling prices significantly due to the launch of the Retina Display MacBook models.
"This is a sign of the 'halo effect' Apple is able to achieve across its product lines through the increased adoption of iPhones and iPads among traditional Windows PC makers, and the difference between the performance of high-end computers when contrasted with lower-priced machines priced at levels similar to the iPad, which is causing significant cannibalisation in PCs," he said.
