Apple overcomes iPhone slump

Apple is still running a well-oiled money-making machine despite cooling demand for its key product, the iPhone.

Apple iPhone11s on display in an Apple store. Picture: Getty Images

Apple has again showed it can deliver growth even while its bedrock iPhone business declines.

The tech giant reported revenue rose 1.8 per cent in the September quarter to $US64.04 billion behind a rise in sales of wearables and services such as apps, streaming-music subscriptions and mobile payments. Those gains helped offset a 9.2 per cent decline in iPhone sales during the period.

Profit fell 3 per cent to $US13.69 billion. That topped expectations but marked the first time since chief executive Tim Cook took over in 2011 that Apple’s profit has declined in all four quarters of a fiscal year.

READ MORE:

Apple bets on new $399 AirPods Pro

The company’s cost of sales have risen considerably since 2017 when it introduced a pricier new iPhone with facial-recognition technology and increased its spending on research and development.

Apple reassured investors that its new iPhone 11 models are being well received, offering guidance for the current period that largely exceeded Wall Street’s projections.

It expects sales between $US85.5 billion and $US89.5 billion for the period, an improvement on the $US84.31 billion it posted in the current quarter last year.

Some investors have feared new iPhone models introduced in September would fail to catch on with consumers, and weigh on sales in the coming year because they offer limited new features. The iPhone still accounts for more than half of Apple’s revenue.

Apple said per-share earnings in the latest quarter were $US3.03. Analysts surveyed by FactSet expected earnings of $US2.83 a share.

Dow Jones Newswires