The Apple Logo
The Apple Inc. store is seen on the day of the new iPhone 7 smartphone launch in Los Angeles. Reuters/Lucy Nicholson

Apple has experienced a decrease in its yearly sales for the first time since 2001, which indicates that the once formidable iPhone is now going through tough competition against much improving smartphone rivals.

Although Apple’s 2016 overall sales of US$216 billion (AU$281 billion) is still a huge number, it’s far off from last year’s record-breaking US$234 billion (AU$304.5 billion). The number of iPhone units sold last quarter was also down to 45.5 million from last year’s 48 million. Apple chief executive Tim Cook would rather dwell on the positive growth of the company’s digital media service platforms, including the App Store and iTunes.

“We're thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our services business, where revenue grew 24 percent to set another all-time record," said Cook.

iPhone sales have been dropping for three years running, although Apple is expecting to bounce back these next three months with sales forecasts between US$76 billion (AU$99 billion) to US$78 billion (AU$101.5 billion), which is higher compared to last year’s US$74.8 billion (AU$97.3 billion).

Apple is looking forward to this year’s holiday shopping sprees, taking into consideration the fact that the next three months will be the first full quarter that Apple’s latest smartphone is on the market. The California-based company hopes the iPhone will sell like hotcakes come December. It is expected that Apple will be offering a few more products by then, but it all depends on what the tech giant reveals at the company’s next media conference on Thursday.

Although no official announcements have been made regarding future Apple merchandise, rumour has it that three MacBook variants with speed boosts and expandable storages will be launched during said event. An iMac update is not to be expected as the refurbished Macintosh desktop computer will probably be on standby until next year’s halfway mark.

The next few months will determine if Apple can sustain its hold on the electronics industry, which they have long dominated for more than a decade.