Apple stock is up, despite iPhone sales continuing to slide

iPhone sales fell for the second quarter in a row, putting a damper on Apple’s revenue and profit for the period ending June 30.

The tech giant sold 40.4 million iPhones in the quarter, down 15 per cent from a year earlier. Profit fell 27 per cent to $7.8 billion, while revenue dropped 15 per cent to $42.4 billion.

Overall results were slightly better than forecast by Wall Street analysts, causing Apple stock to soar; however, analysts worry that consumers just aren’t as excited about the newest iPhone models.

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In April, Apple reported its first revenue drop since 2003, selling ten million fewer iPhones year over year, putting more pressure on Apple and CEO Tim Cook to come up with its next big product.

The one bright spot was a 19 per cent revenue jump for the Apple segment that includes iTunes, Apple Music, and the App Store. Chief Financial Officer Luca Maestri said online services are increasingly important to Apple, since their financial contribution is increasing.

“Our Services business grew 19 percent year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record,” said Maestri.

Interestingly, although iPad sales have been declining over the last year, Apple actually beat analyst expectations for its tablet sales. The company said it sold 10 million iPad’s in the last quarter, bringing iPad revenue from $4.4 to $4.9 billion. Some of that might be thanks to the company’s new 9.7-inch iPad Pro tablet, released in March.

Apple also reported that revenue in “Greater China,” which includes Hong Kong and Taiwan, was down 33 per cent year over year. Previously, China was Apple’s second-biggest market in terms of revenue.

READ MORE: Chinese patent dispute could block Apple’s iPhone 6 being sold in Beijing

Apple has faced several road block in China recently, including patent dispute in China that threatens to block future sales of the iPhone 6 in Beijing. The potential ban stems from a decision issued in May by the Beijing Intellectual Property Office. The agency found the iPhone 6 and iPhone 6 Plus infringed on a patent for the exterior design of a smartphone called the 100C made by a Chinese company, Shenzhen Baili.

– With files from Global News reporter Nicole Bogart

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