Technology giant Apple has suffered a 22 per cent drop in third-quarter profits, despite a jump in sales for its smartphones.
The California-based group said it sold a record 31.2 million iPhones during the three months to June, an increase of 20 per cent on the same period last year.
However, much of the growth came from older versions of the smartphone as Apple came under intense pressure from rivals such as Samsung, and a drop in margins pushed profits down by 22 per cent to $6.9 billion (£4.5bn).
The group sold 14.6 million iPads during the quarter, down from 17 million in the same period last year, while sales of Mac computers were also lower.
Apple has not released a breakthrough product since the iPad was launched three years ago, raising concerns the company has lost its touch since the death of co-founder Steve Jobs in 2011.
New boss Tim Cook tried to assure analysts that the company can still innovate, adding: “We are working on some things we are really proud of. We will see how it does and announce things as we are ready.”
Richard Hunter, head of equities at Hargreaves Lansdown, said: “The fierce competition within this market shows no signs of abating, and the company’s shares have been hit by the difficulty technology companies face after a period of stellar growth.
“Whilst the share price has shown a 31 per cent decline over the last year, expectations are high for Apple’s next wave of products and the market consensus remains locked in at a resolute buy.”