Apple cuts $1bn in spending after missing iPhone sales expectations

Apple missed expectations for iPhone sales in the three months to June

Apple is cutting investments in everything from high street stores to manufacturing equipment to save $1 billion (£639 million) this year.

The updated forecast comes after the company reported its third-quarter earnings, beating expectations on profit but falling short of expectations on iPhone sales.

Apple sold 47.5 million of the flagship device, missing analysts' expectations for sales of 49 million, and sending its shares down as much as 7% in after-hours trading.

In a filing, the tech giant said it now expects to spend $12 billion, 8% less than initially proposed, on product tooling, data centres, corporate facilities and infrastructure, including information systems.

The reduction will not involve any changes to product plans, an Apple spokeswoman told the Wall Street Journal.

Apple is widely expected to be launching a new model of the iPhone in the coming months, with many reports predicting a September unveiling.

Despite the third quarter disappointment on the iPhone, its latest versions - the larger-screened iPhone 6 and iPhone 6 Plus - are still selling well.

Sales of the devices increased 35% year-on-year in the three months to June and doubled in the all-important Chinese market.

Apple is also setting its sights on a strong Christmas period for its newest release, the Apple Watch.

Apple reported net profit of $10.7 billion in its third quarter, up from $7.7 billion last year.