Tech giant Apple has reported the slowest growth in iPhone sales since the product’s 2007 launch.

It also warned iPhone sales will fall for the first time later this year.

Apple sold 74.8 million iPhones in its fiscal first quarter, compared with 74.5 million a year ago.

The company said revenue for the next quarter would be between $50 billion (€46 billion) and $53 billion, below the $58 billion it reported for the same period a year ago.

This would mark Apple’s first fall in revenues since it launched the iPhone.

Despite first-quarter iPhone sales being below the 75 million expected by analysts, it was still a record quarter for the company.

Apple revenue in the three months to December 26 was $75.9 billion and net profit was $18.4 billion, both of which are the highest ever recorded by the company.

Sales of iPhones accounted for 68% of the company’s revenue in the period.

Photo AP

Apple CEO Tim Cook credited “all-time record sales of iPhone, Apple Watch and Apple TV” for the performance.

However, CFO Luca Maestri said the company was operating in “a very difficult macroeconomic environment”.

He added that “iPhone units will decline in the quarter” and that Apple was not projecting beyond those three months.

Luca Maestri partly blamed the strong US dollar for Apple’s flat sales, estimating it had knocked $5 billion off the company’s revenues.

Apple’s sales in Greater China – defined by the company as China, Hong Kong and Taiwan – rose 14%, but that was much slower than the 70% increase a year ago.

Luca Maestri said the softness in China was “something that we have not seen before”, Reuters reported.

China accounts for almost a quarter of Apple’s sales, more than all of Europe combined.

The profitability of Apple’s business improved, with gross margin – or how much the company makes per product – increasing to 40.1%.

Speaking to analysts, Tim Cook said Apple had “the mother of all balance sheets” and that its financial position had never been stronger.

Apple’s shares were down 2.7% in after hours trading at $97.28.