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Will the iPhone 7 Be the Answer to Apple's Problems?

Ask Siri if iPhone 7 will be the answer to Apple's problems, and you're told that a visit to Apple's website should answer that question "and more".

If only it was that easy.

Apple's shares closed down 6.3 per cent at $97.82 on Wednesday, wiping off about $36 billion in market value, a day after the company reported its first-ever fall in smartphone sales, arousing talk of "peak iPhone".

For many analysts, the company's immediate future rests with iPhone 7, which Apple is expected to launch in September.

The iPhone 7 is expected to sport a new look with features such as waterproofing, wireless headphones and force touch as the home button.

But many wonder if that will be enough to entice users to dump their existing iPhones or switch from the Android-based phones that have come to dominate the smartphone market.

Apple usually launches new iPhones in September and sells the most devices in the December quarter.

Unit sales typically drop over the next few quarters, picking up after the next iPhone launch.

Along with the weaker-than-expected iPhone sales, Apple reported its first drop in revenue in a decade. Sales in China, the company's most important market after the United States, fell 26 percent.

Apple also forecast another disappointing quarter for sales.

The bad news overshadowed strong results from the company's growing service business and an increase in share buybacks.

As of Wednesday's close, nearly $200 billion has been wiped off the value of the world's most valuable listed company over the past year - almost the equivalent of the market cap of Wal-Mart Stores, the world's biggest retailer. The stock last closed below $100 in February.

Apple's disappointing results fit a recent pattern for tech companies. Microsoft and Google parent Alphabet came up short of expectations.

(With inputs from Reuters)

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