Apple sales slumped 26 per cent in Greater China in the latest quarter, driving the tech giant to its worst result in 13 years.

CEO Tim Cook said the Hong Kong market was largely to blame, due to its currency value being pegged to the US dollar. Sales in the mainland fell by a more modest (but still alarming) 11 per cent. Greater China sales totalled US$12.49 billion, equivalent to about 24.5 per cent of its global revenues.

Cook added that a year ago Apple sales in China soared a remarkable 81 per cent year-on-year, suggesting that made for a tough benchmark for this quarter’s results.

But Apple cannot blame all the company’s current woes on China: sales in its US home market fell 10 per cent as well.

Globally, Apple sales totalled US$50.6 billion, down from the $58 billion of the previous corresponding period. Its quarterly net income fell from $13.6 billion to $10.5 billion and gross margin fell from 40.8 per cent to 39.4 per cent. International sales accounted for 67 per cent of the quarterly revenue.

Despite the sales decline, Apple is showing no sign of slowing its aggressive expansion program in Greater China which it predicts will soon become its largest single market, overtaking the US.

During the quarter the company opened seven more stores, with five more planned in the current quarter, taking the network of large format stores to about 40.

The company will also take a hit from the Chinese Government’s decision last week to ban Apple’s iTunes music store and its Apple Bookstore – both selling digital content to Chinese customers who have invested in iPhones, iPads or Apple computers.

The biggest drain on sales is the iPhone, which is now struggling to keep pace with a myriad of less expensive models offering similar technology at often vastly lesser prices. Apple sold more than 51.2 million iPhones in the first three months of 2016 – nearly 10 million fewer than during the same quarter of 2015.