Apple Q1 2019: Services, Mac, and wearables up as iPhone revenues dip

Tim Cook CEO of Apple

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But he also pointed to shifts in foreign exchange values that made Apple products more expensive in certain markets.

Sales of the Apple iPhone have fallen hitting the tech giant's financial performance.

The results for the October-December period were slightly above analysts' expectations that were lowered after Cook's January 2 warning.

Apple said it expects revenue between $US55 billion and $US59 billion for the current quarter ending in March, largely below analysts' average estimate of $US58.83 billion, according to IBES data from Refinitiv.

During Apple's Q1 earnings call, Cook touched on foreign exchange issues, mentioning local currency decline in Turkey of 33% in 2018, caused Apple to lose $700 million United States dollars.

Apple reported iPhone revenue of $51.98 billion, which fell below Wall Street's expectations and marked a 15 percent decline year-over-year. Analysts, meanwhile, were anticipating revenue to fall in the $84 billion range with EPS somewhere around $4.17. During that quarter Apple sold 77.3 million iPhones, 13.2 million iPads, and 5.1 million Macs. Apple last quarter announced that they would no longer be disclosing iPhone unit sales.

Investors reacted positively, elevating Apple's stock by more than 4 percent to $160.40 in extended trading after the report came out. That unexpected move raised suspicions that Apple was trying to hide a forthcoming slump in iPhone sales - fears that were realized during the holiday season.

Earlier this month, the company warned that its holiday sales would be lower than previously expected due to "economic deceleration" in emerging markets and weak demand for iPhones in China, among other factors.

"Eighty percent of Apple's problem is pricing hubris and a lack of innovation", Ives said.

"When you look at foreign currencies and then particularly those markets that weakened over the a year ago those (iPhone price) increases were obviously more", Cook told Reuters. After all, Apple over the years has consistently and impressively delivered jaw-dropping revenue, monstrous iPhone sales, and of course, record-setting profits that simply put most every other company on the planet to shame.

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