iPhone (2)

Apple has warned that iPhone sales could fall for the first time since the product launched in 2007 after reporting its slowest growth so far.

The tech giant said 74.8 million iPhones were sold in the first quarter of its financial year, up just 500,000 from the same period last year. Despite the slower growth in iPhone sales, Apple still managed to report world record profits of $18.4 billion and world record revenues of $75.9bn.

But with iPhone sales accounting for nearly 70% of Apple's revenues during the period, performance is set to slow dramatically in the next quarter. Apple said revenues are likely to be between $50bn and $53bn.

Luca Maestri, Apple chief financial officer, said the company was in "a very difficult macroeconomic environment", blaming the strength of the US dollar for the lack of growth in iPhone sales. He estimates it cut revenues by $5bn in the period.

The strength of the US dollar hit sales in Greater China in particular - which it defines as mainland China, Hong Kong and Taiwan - where sales rose 14% during the three months. But that pales in comparison with the 70% growth it reported a year ago. Sales from China account for nearly a quarter of Apple's sales - more than the whole of Europe combined.

Apple's shares fell 2.7% following the news.