Apple sold 40.4 million iPhones during the quarter, beating analyst expectations of 40 million, but marking a decline of 15 per cent on the 48 million sold in Q3 2015. The latest batch of stills of the new iphone however doesn’t specify the name of the model, but it does show outlook of the newer version.
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Net income for the quarter was down 27% to $7.8bn as iPhone sales fell for the second quarter in a row, down 21% on the last quarter and 15% on the same quarter a year ago, resulting in a 23% drop in revenue.
But sales of the Apple devices in India rose 51 per cent in the last three quarters compared with a year earlier, Cook said on Tuesday.
The sales of Mac computers is also down to 4.25 million, which is 10.5% lower than the same quarter past year, and this is also true for iPads, which sold 10 million, which is 8.3% lower.
Apple shares traded at 7% higher in afterhours trading after topping the estimates.
But the biggest bright spot in the company’s report was a 19 percent sales jump for the segment that includes iTunes, Apple Music, the App Store and services like Apple Pay and iCloud storage.
The shift is good news for the firm because it allows it to make more money from its existing users.
Apple’s report showed a sharp drop in revenue from China, which reverses gains since it began selling its iPhones there.
“We expect this business will continue to grow” even if Apple sells fewer devices in a particular quarter, Chief Financial Officer Luca Maestri told The Associated Press.
Apple’s still optimistic about the iPhone, CEO Tim Cook assured analysts on a conference call. In one change, Apple is reducing its commission on apps that are sold on a subscription basis.
The results underscored the challenges for Apple, which has built a huge business around the iPhone but is unlikely to see continued growth, due to a saturated smartphone market and increased competition.
China accounts for nearly a quarter of Apple’s sales, more than all of Europe combined.
The decline was blamed on falling iPhone sales, which typically make up 70 per cent of the company’s overall sale.
“You shouldn’t look at what’s there today and think we’ve done what we want to do”, Cook added, in reference to Apple TV, which he said was merely a “foundation” for future models.
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On the surface, the numbers look bad for Apple despite beating estimates on many fronts.
