Apple iPhone sales slump 10% - the biggest drop since the pandemic. This is why are shares up 7%?

Apple on Thursday revealed its steepest quarterly decline in iPhone sales since the beginning of the Covid-19 pandemic, deepening a slump which is increasing pressure on the tech company. 

iPhone sales dropped 10 percent year-on-year for the three months ending March 31 - the latest sign of weakness in a product that generates most of Apple's revenue.

It marked the biggest drop in iPhone sales since the third quarter of 2020, when production bottlenecks caused by factory closures during the pandemic resulted in a delayed release of that year's model. 

However despite this slump, Apple's shares climbed 7 percent in extended trading. 

This was because the company announced that its board had authorized $110 billion in share buyback - a 22 percent increase over last year's $90 billion authorization.

This is the largest in history, ahead of Apple's previous repurchases, according to data from Birinyi Associates reported by CNBC.

iPhone sales dropped 10 percent year-on-year for the three months ending March 31 - the latest sign of weakness in a product that generates most of Apple's revenue

Buybacks help boost stock prices by rewarding investors with cash simply for holding stock in the company.

The 10 percent iPhone downturn - to $45.96 billion - was the main reason Apple's revenue for the latest quarter decreased 4 percent from last year's to $90.8 billion. 

It marked the fifth consecutive quarter that Apple's revenue dipped from the previous year. 

The company's profit in the past quarter totaled $23.64 billion, or $1.53 per share - a 2 percent dip from last year.

But the tech giant's revenue and earnings per share came in slightly above analysts projections, according to FactSet Research. 

Apple shares have fallen 10 percent so far this year, erasing about $300 billion in stockholder wealth.

Part of the reason for the slumping iPhone sales stemmed from a big boost in sales during the same three-month period in 2023, when Apple realized $5 billion in delayed iPhone 14 sales caused by pandemic-driven shipment delays. 

'If you remove that $5 billion from last year's results, we would have grown this quarter on a year-over-year basis, Apple CEO Tim Cook told CNBC.

'And so that's how we look at it internally from how the company is performing.'

'If you remove that $5 billion from last year's results, we would have grown this quarter on a year-over-year basis, Apple CEO Tim Cook told CNBC

Apple's shares climbed 7 percent in extended trading following the announcement it would repurchase $110 billion of stock

Mac sales were up 4 percent to $7.45 billion, Apple announced. 

Cook said sales were driven by new MacBook Air models that were released with an upgraded chip in March.  

So-called 'Other Products', which is how the company reports sales of its Apple Watch and AirPods headphones, was down 10 percent year-on-year in the first quarter to $7.9 billion.

In the first quarter of this year Apple released the Vision Pro virtual reality headset - its first new major category in several years - but the device is expected to sell in low quantities compared to other popular products. 

'We're only scratching the surface there so we couldn't be more excited about our opportunity there,' Cook told CNBC.