Apple Inc. is expected to report iPhone sales increased slightly more than 1% in the holiday quarter when it announces earnings on Tuesday, its slowest growth ever and far from the double-digit growth investors have come to expect.
The iPhone 6S and 6S Plus, which boasted record weekend sales when they launched in September, are now facing weak demand, according to analysts, because they have fewer distinguishing features than their popular predecessors.
The new iPhones also face tough comparisons with the strong sales of their older siblings.
Apple tapped into a crucial market when it unveiled its bigger-screen 6 and 6 Plus phones in 2014, grabbing the attention of Asian customers, who had previously lapped up phablets from players such as Samsung.
"Apple has become a victim of its own success as the blockbuster iPhone 6 product cycle was hard to replicate as many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7," FBR Capital Markets analyst Daniel Ives said.
China, the company's fastest-growing market, may also have weighed on first-quarter results, as a slowdown in the country's economy forced consumers to tighten their purse strings.
Analysts estimate Apple sold 75.5 million iPhones in the October-December quarter, a 1.3% increase from a year earlier, according to research firm FactSet StreetAccount.
This compares with a nearly 46% year-on-year jump in iPhone sales in the first quarter of 2015. The slowest growth in quarterly iPhone sales so far has been 6.8%, in the second quarter of fiscal 2013, according to data from Statista.
