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The company’s CEO, Tim Cook, was optimistic about sales of services and iPhones but acknowledged that the economic uncertainty would likely impact areas such as gaming and digital advertising.

Despite recent financial results among the company’s worst in years, Cook and Apple’s leadership team tried to assure investors that the company is on a steady, albeit slower, growth trajectory.

For the most recent quarter, Apple’s profits fell short of Wall Street expectations for the first time since 2016. This was primarily due to a decline in iPhone sales, the first such drop since 2020. Despite this, the stock price only dropped by 2% after the Chief Financial Officer reported that iPhone sales were poised to improve.

Apple’s sales for the quarter totaled $117.2 billion, a 5% decrease from the previous year, with every region experiencing a decline.

The only areas that showed growth were services and iPads. The earnings per share were $1.88, lower than the expected $1.94. Cook stated that production disruptions that impacted the quarter were now resolved.

In addition to supply chain challenges, the strong U.S. dollar also affected Apple, which generates over half its sales from outside the Americas. Although the impact was less severe than expected, Cook pointed out that an 8% decline was still a significant headwind. The foreign exchange rate is estimated to have a 5% impact on sales for the next quarter.

It’s not all bad

The company’s services segment, which includes Apple TV+ and the App Store, increased by 6% to $20.8 billion in revenue. Additionally, iPad sales rose 30% to $9.4 billion, exceeding analyst predictions of $7.8 billion.

Mac computer sales, which saw a boom during the pandemic’s work-from-home trend, declined by 29% year over year to $7.7 billion. The wearables and accessories segment, including the Apple Watch and AirPods, fell 8% to $13.5 billion. Despite these setbacks, Cook pointed out that the company now has 2 billion active devices and 935 million paid subscriptions, both up from the previous year. The services segment also set records in multiple markets, including China.

Investors seem to have given Cook the benefit of the doubt, and the market has a “buy the dip” mentality.

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