iPhone maker Apple (AAPL) on Tuesday soundly missed earnings expectations for the quarter ended March 26 in what was expected to be a tough quarter. The company also said revenue in the upcoming third quarter would also disappoint investors, dropping to between $41 billion and $43 billion, because consumers are buying fewer iPhones and iPads, and newer products like the Apple Watch aren't offsetting the decline.

Analysts had expected Apple to post revenue of about $47.4 billion in the quarter that ends in June. The shares skidded 6% lower in extended trading to $98.14. During its fiscal second quarter, revenues of $50.55 billion missed analysts' $51.97 billion consensus, while the $1.90 in earnings per share that Apple reported fell roughly 10 cents short of consensus.

"While we continue to view Apple through a long-term lens, we acknowledge that the undercurrents of event-driven trading are likely to prevail in the interim," wrote Jim Cramer and Jack Mohr of the Action Alerts PLUS portfolio, which owns Apple.

The sole bright spot in the earnings was that Apple sold more iPhones than expected, with 51.2 million purchased vs. expectations of 50.5 million units. In the same period a year earlier, the company peddled 61 million during the hype for its newest 6 range of smartphones.

"Our team executed extremely well in the face of strong macroeconomic headwinds," said Apple CEO Tim Cook in a statement.

The company is experiencing its first-ever weakening in demand for its smartphones after introducing the iPhone in 2007. In March, it launched the iPhone SE to rekindle interest with its lowest-ever starting price of $399 and smaller 4-inch size to compete with the palm-busting dimensions of its Android rivals.

"We note extremely hard comparables, which are seen as the toughest in the iPhone 6S cycle (iPhone 6/Plus sales rose 55% during the March quarter in 2015), and challenging macroeconomic conditions at the start of the calendar year. Indications across the supply chain for manufacturers appear to show still-soft demand for iPhones," wrote S&P Capital IQ analyst Angelo Zino in a note prior to the release.

Sensing it would disappoint investors, Apple said it would boost its dividend 10% to 57 cents and expand its share repurchase program to $175 billion after approving $140 billion for share buybacks last year. The tech giant noted that it has now returned more than $163 billion to investors through dividends and share repurchases since beginning dividends in 2012.