Apple (NASDAQ: AAPL) enjoyed yet another record quarter for iPhone sales, and its quarterly profits and earnings per share easily beat Wall Street estimates. But sales growth for the smartphone maker appears to have plateaued, and iPhone unit sales are expected to fall for the first time during the current quarter.
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So the company used its earnings report to tout its revenues generated by its services.
Apple sold 74.8 iPhones during the quarter, up less than 1 percent over last year's sales of 74.5 million and just shy of the 75 million to 76 million Wall Street expected. It sold 16.1 million iPads, marking a 25 percent year-over-year slide from last year's 21.4 million iPads sold.
The company posted a record $75.9 billion in quarterly revenues, with $18.4 billion in profits and earnings per share of $3.28.
Apple once again declined to disclose sales figures for the Apple Watch, leaving analysts to speculate just how successful the gadget is. Walter Piecyk of BTIG estimated the company sold 5 million Apple Watches during the quarter, well short of the 6.5 million Piecyk had predicted.
Tim Cook blamed flagging hardware sales on languishing economies worldwide and the stronger value of the American dollar. And while sales in Greater China rose 14 percent last quarter, sales there are beginning to slow as well as smartphone penetration in that market approaches the saturation point. Meanwhile, the smartphone market is already flattening in more mature markets such as the U.S. and Western Europe.
Likely as a result, Cook made a point to emphasize Apple's services such as its App Store, iTunes Store and Apple Pay, as The Wall Street Journal noted. Such offerings brought in $5.5 billion in Apple's most recent quarter, up 15 percent year-over-year. The company rang up $16.8 billion for the fiscal year ended Sept. 26, up 13 percent from the previous year.
Even if hardware sales continue to slow, devices already in the market will continue to generate revenue from services, Cook implied.
"I do think (services are) probably something that the investment community would want to and should focus more on," Cook said, according to the WSJ.
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