Apple profits fall 27pc as iPhone sales decline
Published 27/07/2016 | 08:06
Apple has reported a second-consecutive fall in profits as sales of the iPhone continue to decline.
On Tuesday night, the company reported a 27pc decline in quarterly profits and a slide in revenue, as it struggled to boost sales of the iPhone almost 10 years after it was released.
Apple also predicted that sales would fall in the next quarter, extending a prolonged decline in revenue that marks the biggest challenge to chief executive Tim Cook since Steve Jobs' death five years ago.
However, shares rose in after-hours trading, with the results better than investors had expected. Apple said they reflected "stronger customer demand" than anticipated.
The company reported a 15pc decline in revenue to $42.4bn (£32.3bn) in the three months to June 25, while profits fell from $10.7bn to $7.8bn.
Apple sold 40.4m iPhones - a 15pc fall. However, the company's software and services division, which includes the App Store, iTunes and Apple Music, grew 19pc. As sales of its iconic hardware products fall, Apple is pinning its hopes for growth on expanding its internet services arm.
Apple sold 9.95m iPads during the quarter, the lowest sales for five years, but revenues from the division grew for the first time in more than two years as it sold more of its more expensive models. Revenues from Mac computers and the "other" division, which includes the Apple Watch, fell.
"We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter," Mr Cook said.
"We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC [Apple's Worldwide Developers Conference] in June."
Shares rose by more than 6.5pc after the results were released.