Hi-tech giant IBM has reported its biggest drop in profits in almost a decade, bemoaning companies' continuing reluctance to investment in IT.

In its third quarterly earnings decline in a row, IBM posted a profit of $1.2bn for the first three months of the year, down from $1.75bn a year earlier.

The result was the sharpest fall in earnings since the firm emerged from a string of shattering losses in 1993.

Some tech cheer was provided by rival computer maker Apple, which reported profits more or less steady at $43m for the quarter.

But Apple is far more oriented towards the consumer market, where demand has been more robust than among cash-strapped corporate technology buyers.

Hardware tumbles

IBM's decline was mainly felt in its hardware businesses, where overall revenue dropped by 25% during the quarter.

In its services division, an increasingly important revenues earner for the firm, sales were steady.

IBM's increasing focus on selling services such as IT consultancy has been a key part of its revival since the early 1990s, and has acted as a valuable hedge against the decline in computer sales and price wars in the PC market.

A decline had been widely anticipated, since IBM shocked the market with a profit warning last week.

"Our first-quarter results, while disappointing, were largely the result of the continued weak global business environment," said Sam Palmisano, IBM's new chief executive.

"Customers in every part of the world deferred technology purchases in the first quarter, and these widespread deferrals hurt us across every one of our major business segments."

Apple stays sweet

Apple, which has few sources of revenue outside the sale of personal computers, and related software and accessories, earned a net $40m during the same quarter, only marginally down from the previous year's $43m.

Like IBM, the firm suffered a humbling during the 1990s, and is now relatively modest in its ambitions, selling a range of attractively designed hardware to a small but loyal market.

In this latest quarter, Apple won plaudits for its new designs; it also launched a revamped operating system and a suite of free software products to enhance audio and video capability.

Both results were released after the markets closed; US shares had seen a relatively gloomy day's trading.

US share prices have swung sharply up and down in recent days, typical behaviour for the peak of the earnings season.