This story was updated at 11:21 a.m. EST.

Apple’s shares plunged Wednesday morning after the company reported lower-than-expected sales in the three months ending in December and warned that things aren’t likely to get better anytime soon. Sales of the company’s core product, the iPhone, were flat last year for the first time since the popular device was introduced in 2007.

Sales of the iPhone are crucial to Apple. They made up nearly 70 percent of its revenue in the past holiday quarter. Investors sold stock on concern that this high exposure to the smartphone market is finally catching up to the Cupertino, California-based tech company.

Apple Inc. (Nasdaq:AAPL) was trading 5.74 percent lower, at $94.25, Wednesday morning in New York. The stock was trading well below the broader S&P 500’s performance. And a global outage of Apple’s Safari browser on Wednesday did nothing to boost confidence. 

“Our record sales and strong margins drove all-time records for net income and EPS [earnings per share] in spite of a very difficult macroeconomic environment,” said Luca Maestri, Apple’s chief financial officer, said in a statement. A strong dollar — which has gained 23 percent against a basket of currencies since the summer of 2014 — has hurt all U.S. corporate profits earned in foreign currencies. Demand for smartphones in China, a key growing market for Apple, has plunged, too.

For the quarter, Apple reported an all-time quarterly record of $18.4 billion in profit on revenue of $75.9 billion. But sales grew by only 1.7 percent, the lowest in 10 consecutive quarters and the worst holiday period on record.

Gross profit margins rose by two percentage points, to nearly 40 percent, compared to the last three months of 2014, indicating that profits were boosted by factors other than sales, such as higher prices or lower production costs.

iPhone 7 Plus Customers hold the iPhone 6s during the official launch at an Apple Store in Sydney, Sept. 25, 2015. Photo: Reuters/David Gray