Apple fell further behind rival Samsung in the battle of the smartphones with iPhone sales slowing and profits falling for the first time in ten years.
In the first three months of 2013 it sold 37.4million handsets compared to 35.1million a year earlier.
In contrast, Samsung is expected to shift 65million phones over the same period – up from 41million last year.
Lost its shine: Apple is expected to reveal first profit fall in a decade today as sales of iPhone and iPad sales slump
And with its latest Galaxy S4 phone going on sale as early as today in the US, the South Korean company looks set to extend its lead in the global smartphone race.
Apple, which last week lost its crown as the world’s most valuable company to oil giant Exxon Mobil, posted its worst set of results in the last decade.
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The US tech giant’s profits for the period fell by 18 per cent to £6.3billion after it was forced to cut margins to keep prices down.
Sales were better than expected, rising 11.3 per cent to £28.6billion. Some 19.5million iPads were sold during the quarter, up from 11.8million.
Apple CEO Tim Cook (left) and founder Steve Jobs (right) holding an iPad who died in 2011 following a lengthy battle with pancreatic cancer aged 56
Apple’s Wall Street shares have fallen by more than 40pc since September on fears that its flagship iPhone has lost its lustre.
But yesterday Apple tried to appease shareholders with a 15 per cent hike in dividend to $3.05 per share.
The results pile further pressure on Tim Cook, Apple’s boss who took over from founder Steve Jobs in January 2011.
However he assured shareholders: ‘Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline.’
Drop: Apple's shares have hit their lowest levels in a year-and-a-half suggesting the company has lost crucial ground to rivals including Samsung
Since Cook began running the company, Apple has only launched the iPad mini, which has sold poorly and whittled down profit margins.
Under Jobs, who died in October 2011, Apple released a series of revolutionary gadgets, from the music-playing iPod to the iPhone and the iPad.
Its products dominated every sphere the company entered, forcing rivals to play catch-up.
Now Cook faces renewed calls to launch new game-changing products.
Rivals: Apple's iPhone 5 (left) sales have slowed at the same time it faces competition from Samsung which unveiled its latest Galaxy S4 handset (right) last month
Pride: JK Shin, Samsung's president and head of IT and mobile communications, shows off the Galaxy S4 in each of its two colors
A new way to browse: The Galaxy S4 has different options for navigation. If the phone senses someone is looking at the screen, the user can tilt it forward or backwards to scroll up and down a Web page
Laurence Balter, technology analyst at Oracle, said: ‘It was OK when Steve Jobs would say we have some great things in the product line, but right now that credibility has been lost.’
He added: ‘The market needs to see some evidence that the future is bright because the candle is flickering.’
Shares in Apple hit a record high in September, but have dropped sharply since then.
Earlier this month the company that manufactures iPhones and iPads in China, Hon Hai Precision Industries, reported its biggest fall in sales in 13 years – raising suspicions Apple has cut orders for the coming months.
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Eye-catching: Samsung Electronics in Australia transformed the iconic sails of the Opera House into a visual display showcasing hundreds of photographs submitted by Australians on Facebook
A photograph is projected onto the sails of the Opera House during the unveiling of the new Samsung Galaxy S4 smartphone at the Sydney Opera House
Dramatic: Apple fell further behind rival Samsung in the battle of the smartphones which launched its new handset in Australia with this dramatic display on the Sydney Opera House
Surfs up: A photograph submitted on Facebook is projected onto the Sydney Opera House
With its latest Galaxy S4 phone going on sale this week, Samsung looks set to extend its lead in the global smartphone race
Extravagant: Samsung pushed the boat out at the launch of its new handset in Australia by projecting images onto the Sydney Opera House
Proving they are a match for Apple, Samsung outrageously showed they are all about the style after putting on this incredible display in Sydney