Apple CEO Tim Cook had an interesting explanation for lacking iPhone sales during the company’s latest earnings call Tuesday: Reports and speculation about future models could contribute to depressed demand, he acknowledged, with consumers taking a break in upgrading their phones to wait for the next iteration.
Cook made these remarks as the company revealed that a recent recovery in sales didn’t last long. After briefly growing its iPhone sales last quarter, the company once again sold fewer phones during its most recent quarter than during the same quarter a year ago. Apple sold a total of 50.8 million iPhones during the first three months of this year, compared to 51.2 million during the same time a year ago.
Apple revealed these numbers as part of its most recent earnings release, covering the company’s fiscal Q2 of 2017 which ended on April 1. The company generated $52.9 billion in revenue during the three months ending March 31, compared to $50.6 billion a year ago.
The company’s net income for the quarter was $11 billion, compared to $10.5 billion during the same time period last year. This translates to earnings per diluted share of $2.10, compared to $1.90 a year ago. Analysts had expected earnings of $2.02 per share and revenue of close to $53 billion.
Apple CEO Tim Cook tried to paint the iPhone results in a positive light, saying in a statement: “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus.”
However, investors were disappointed by the results, sending Apple’s stock down around 2.2 percent, or $3.30, in after-hours trading. Apple had seen its iPhone unit sales decline for several consecutive quarters until the rebound last quarter.
Sales for some of Apple’s other products were mixed. The company sold 8.9 million iPads, which is down 13 percent from last year. Revenue generated within the “other products” category — a catch-all for Apple Watch, Apple TV and accessories like Beats headphones — actually increased by 31 percent, something that Tim Cook attributed to strong Watch and AirPod sales. Cook said that Watch sales nearly doubled year-over-year, without providing any absolute numbers.
Services revenue continued to increase year-over-year, but was actually down 2 percent from the company’s holiday quarter. Altogether, Apple generated some $7 billion with Apple Music, App Store sales and other services, compared to just shy of $6 billion a year ago.