Apple iPhone sales fall but tech giant beats estimates
Second consecutive quarter of decrease in sales of smartphone
- Revenue falls 15% annually and EPS drops 23% but initial estimates were lower
- iPhone makes up around two thirds of Apple's sales and even more of its profit
Apple's third quarter results provided another fall in sales for its flagship iPhone, despite narrowly beating expectations against the year-ago period.
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40.4 million iPhones were sold in the third fiscal quarter, compared with the projected 40.02 million from analysts.
The tech giant reported its first ever fall in sales for the phone in the second quarter of this year, ahead of the expected release of the iPhone 7 in September.
On the surface, the numbers look bad for Apple despite beating estimates on many fronts.
Revenue fell 15% annually to $42.4bn, earnings per share also plunged 23% to $1.42. Expectations had been particularly low due to various data points and reports that the iPhone 7 may not feature huge improvements from the previous model.
Apple shares traded at 7% higher in afterhours trading after topping the estimates.
A slowdown in sales in its Asian markets were one of the major reasons for the declines, with a 33% drop in Greater China - China, Hong Kong and Taiwan.
"It is very clear that there are some signs of economic slowdown in China, and we will have to work through them," said Apple chief financial officer Luca Maestri.
"We understand China well and we remain very, very optimistic about the future there," Maestri added.
Despite the near-term slip, investors seem to be banking on Apple's long-term growth prospects, as is CEO Tim Cook, who points to new products as a method of stimulating their numbers.
“There is quite a bit that we are doing beyond our current products,” Mr Cook said.
Apple is increasingly flirting with the idea of becoming involved in the race to produce electric cars, stepping up its focus on artificial intelligence and machine learning in recent months.
“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.