AGENCIES: Apple Inc (AAPL.O) iPhone sales dropped to less than half of quarterly revenue for the first time in seven years, but CEO Tim Cook on Tuesday described the change as successfully diversifying away from a single product and forecast results above Wall Street targets.
That strategy proved especially useful in China, the world’s largest smartphone market. Investors feared a drumbeat of negative shipment data from the Chinese government and analysts meant problems for the iPhone maker.
Apple’s greater China sales, which had gone into a near free fall earlier this year, dipped only slightly, assuaging concerns that trade tension were undermining Apple’s standing in one of its most important markets. Shares rose 4.25% after hours.
Moribund global mobile phone sales have led Apple to focus on accessories like the Apple Watch and growth in music, apps, gaming, video and a credit card coming in August. In mainland China, Cook said the overall number of Apple device users had grown in the fiscal third quarter, helping to increase the market for its services, whose sales were up by more than 10% there.
“We actually grew in mainland China,” Cook told Reuters. “Non-iPhone revenue grew 17%. We grew in every category outside of iPhone.”
But globally, iPhone sales fell 12% to $25.99 billion, after dropping 17% in the previous quarter, and matched Wall Street targets.
(Agencies)
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