Apple shares have tumbled 7 per cent at the opening bell on Wall Street after the tech giant revealed its first drop in revenues since 2003 and a fall in sales of its handsets.

Late last night, the former stock market darling reported revenues down $7.2billion from a year ago to $50.6billion, while iPhone sales dropped to 51.2 million from 61.2 million.

The release caused a mass sell-off of its shares in after-hours trading in New York and the slide has continued this afternoon, wiping $40billion off its market value in the process - the equivalent of the entire value of Netflix.

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Bargain hunting: Apple loyalists have warned against writing the firm too early, adding that the this session could be the prefect opportunity to bag its stock at abnormally low prices

Investors were also spooked by the Dow Jones and Nasdaq listed firm's guidance for the next quarter which suggests its performance is not about to improve anytime soon.

Connor Campbell, at Spreadex, said: 'Falling by around 30 points after the bell, the Dow’s main obstacle this Wednesday was, unsurprisingly, Apple.

'Just about matching its after-hours performance with a 7 per cent-plus plunge at the start of the session Apple took around 50 points off of the Dow Jones this afternoon, investors continuing to balk at the staggering slide seen in first quarter iPhone sales year-on-year.'

According to analysts, the most troubling part of the results for investors is that Apple remains so heavily focused on its hardware - i.e. it makes and designs products rather than provides business services.

As a result it relies on new product and design innovations and if these dry up there is nowhere for the company to turn.

All of Apple's hardware businesses saw double-digit year-over-year declines in the first quarter.

YEAR-ON-YEAR COMPARISONS iPhone Q1 2015: 61.2 million Q1 2016: 50.4 million iPad Q1 2015: 12.6 million Q1 2016: 10.1 million Profit Q1 2015: $13.6 billion Q1 2016: $11.1 billion Sales Q1 2015: $58 billion Q1 2015: $50 to $53 billion

iPhone revenue - which makes up around two thirds of the firm's total sales was down 18 per cent - iPad revenue was off 19 per cent, and Mac revenue - which has typically been a reliable but relatively unexciting business segment for the company - also tumbled 12 per cent.

Apple's 'Other Products' business, which includes Apple Watch, saw a 30 per cent year-over-year boost and its services business was up 20 per cent.

Unfortunately for Apple, these last two parts of the businesses are not large enough to offset the declines in its core hardware arm.

Geographically there are also major concerns, with sales falling faster in China than in any other region, down 26 per cent compared to the previous year, and sales in the Americas off 10 per cent.

Apple chief executive Tim Cook had been relying on the growing middle class in China for growth in the company's sales.

Experts have suggested that its only option to turnaround the business may be bringing forward the launch of the iPhone 7 to later this year.

Its last major iPhone launch was back in September 2015, while the Apple Watch was released two years ago - although some critics have dismissed this as merely a sideshow.

But there are also genuine fears that Apple has lost its innovation and design edge and as a result loyal consumers are no longer addicted to their products.

Its results caused a mass sell off of its shares in after hours trading in New York, with the stock dropping 8 per cent and wiping $40billion off its market value Source: Bloomberg

Saturated: Slowing growth in China has been suggested as the core reason for the drop, an area Apple has focused on heavily in the last two years, alongside the increasingly saturated smartphone market

Naeem Aslam, at Avatrade, said: 'The problem with Apple is that we have not seen any major revolutionary products. The Apple Watch is one of the new product which they have produced recently and it is nothing but a distraction.

'Users do not feel the need for a new top of the line iPhone because the differences are very minuscule between the iPhone models. Hence, the firm will struggle to match the expectations going in future.'

Mark Hawtin, investment director at asset manager GAM, said: 'iPhone sales are clearly faltering as the high end reaches saturation and functionality for new models doesn't bring anything game changing.

'That means replacement cycles lengthen. At the same time the Company has clearly taken the decision to try and increase the addressable market at the low end with the inevitable consequences for gross margins.'

But Apple loyalists have warned against writing the firm off too early, adding that the this session could be the prefect opportunity to bag its stock at abnormally low prices.

The last time its shares saw an 8 per cent drop was after it reported its results in January 2014 and a 12 per cent plummet in January 2013.

Tim Cook, chief executive, said: 'I think that the market, as you know, is currently not growing.

'However, my view is that's an overhang of macroeconomic environment in many different places in the world. We are very optimistic that this too shall pass and that the market, and particularly us, shall grow again.

'The future of Apple is very bright, out future product pripeline has some amazing products.'

Jasper Lawler, at CMC Markets, added: 'Apple's had its critics from day-one who said that it was a one-trick pony and that iPhone sales couldn't rise indefinitely, so after 13 years they've got it right.

'Investors will be looking for evidence that this is just a blip caused by tough yearly comparisons because of the launch of the iPhone 6 and that demand will pick up once the new iPhone 7 is released. Nonetheless, it does appear Apple has reached an inflexion point.'