According to ABC, Apple's historic drop in revenue shows the smartphone market is reaching saturation point.
The iPhone sales dropped 13 per cent to $51.19 million in the recently ended quarter, compared with $61.17 million in the same period a year ago.
Apple sold more than 51.2 million iPhones in the first quarter of 2016. That was more than many analysts expected, but still fewer than the 61 million iPhones sold a year earlier.
Angelo Zino, a financial analyst with S&P Global Market Intelligence, noticed: 'They need to come out with that next great product, Apple absolutely needs to start diversifying their revenue base.'
Many were hoping the Apple Watch would be the company's new great hit when it went on sale one year ago. Apple hasn't identified sales figures for the watch, but most analysts assess the company has sold 12 million or more, producing well over $5 billion incomes.
Meanwhile, the company is also extensively believed to be working on other new products, such as virtual reality headsets and electric cars.
Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services. Its hardware products include the iPhone smartphone, the iPad tablet computer, the Mac personal computer, the iPod portable media player, and the Apple Watch smartwatch.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976, to develop and sell personal computers.