Apple iPhone sales decline while profits register minor gain in Q2

The Company posted quarterly revenue of $52.9 billion and quarterly earnings per diluted share of $2.10.

Shares of the stock fell in after-hours trading on Tuesday after the report and were down 1.4% to $145.38 on Wednesday morning.

Many analysts anticipate that the company will deliver a completely redesigned iPhone later this year.

Despite management's goal to double Services revenue by 2020 (revenue grew 18 per cent year-over-year to US$7.04 billion in Q3), investors remain focus on the iPhone.

Expectations are building ahead of Apple's 10th-anniversary iPhone range this fall, with investors hoping that the launch would help bolster sales. Despite having recently launched the new £399 iPad, firm shifted just 8.92 million tablets during the quarter, down nine per cent compared to the 10.2 million flogged this time previous year.

Apple continues to see a slow down in the sales of iPhones largely due to a saturated smartphone market, sluggish demand in China - Apple's second-biggest market after the U.S, and less frequent upgradation of iPhones by customers.

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As for the upcoming quarter, Apple is expecting revenue between $43.5 billion and $45.5 billion with a gross margin between 37.5 percent and 38.5 percent. Despite the strong financial results, iPhone and iPad shipments were weaker than consensus estimates, causing many analysts to reduce earnings estimates for the remainder of the year.

Profit for the quarter ending 1 April rose to $11.1bn (£8.5bn) from $10.5bn (£8.1bn) a year earlier.

Analysts on average had expected $2.02 per share, according to Thomson Reuters I/B/E/S.

It wasn't all bad news though; Apple reported a 4.6% rise in revenue to $52.9 - albeit down on the $53.02 billion forecast.

Sales in the company's services business - which includes the App Store, Apple Music, Apple Pay and iCloud - jumped 17.5 percent to $7.04 billion. He noted that the product is "still very much in the ramping mode".

Still, the company has to brace for a rough third quarter.

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