Apple sells fewer iPhones in China

Apple Inc reported lower-than-expected iPhone sales in the latest quarter, its slowest-ever growth in shipments, and forecast sales below Wall Street's estimates for the current quarter as the company began to feel the effects of economic softness in the critical Chinese market.

Apple said on Tuesday it sold 74.8 million iPhones in its fiscal first quarter, ended Dec 26, the first full quarter of sales of the iPhone 6S and 6S Plus. The 0.4 percent growth in shipments was the lowest since the product was launched in 2007.

Apple's shares, which have fallen 5 percent this year, were up 0.4 percent at $100.42 in volatile after-hours trading.

While revenue in Greater China rose 14 percent in the quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Apple CFO Luca Maestri told Reuters in an interview.

"As we move into the March quarter it's becoming more apparent that there are some signs of economic softness," Maestri said. "We are starting to see something that we have not seen before."

Analysts have long feared that Apple's sales in China, one of its top two markets, would falter amid a broad economic slowdown.

Apple forecast second-quarter revenue of $50 billion to $53 billion, below analysts' average forecast of $55.6 billion.

The company reported revenue of $18.37 billion from Greater China, accounting for 24.2 percent of total revenue. Revenue from the region had nearly doubled in the fourth quarter.

Apple's iPhone shipments fell short of analyst expectations for 75.5 million, according to research firm FactSet StreetAccount.

The company's first-quarter net profit rose to $18.36 billion from $18.02 billion, while revenue increased 1.7 percent to $75.87 billion, both records for the company.