Apple has signalled that it could lower iPhone prices in an attempt to boost falling sales.
The firm reported a decline in both revenue and profits in its latest quarterly financial results on Tuesday night.
In the three months ending in December, it reported a 15 per cent fall in sales of the iPhone.
This reflected a dive from £46.8 billion in 2017, down to £39.8 billion a year later.
Apple Chief executive Tim Cook said customers were are also struggling with the firm's high prices.
He signalled that price rises to help account for the expected sales slowdown would be tempered to help recovery.
Mr Cook said iPhone prices would be set at local currency rates in future.
Mac, iPad and the Wearables, Home and Accessories category all experienced an increase in net sales.
Apple's services - including its music streaming platform, the App Store, iCloud storage and Apple Pay – jumped 19 per cent.
But the hole left by weak iPhone sales resulted in a total drop to £64.5 billion, versus £67.6 billion 12 months prior.
Profits also fell slightly to £15.3 billion, compared to £15.4 billion previously.
"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," said Mr Cook.
"Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments.
“That's a great testament to the satisfaction and loyalty of our customers, and it's driving our Services business to new records thanks to our large and fast-growing ecosystem."
The results come after Apple issued a rare warning to investors at the beginning of the month, cutting its sales forecast due to a slump in iPhone sales in China.
Tuesday's results reflected the economic slowdown in China, with sales in the country down sharply compared to any other region.
