Apple Profits Edge Higher Despite Lower iPhone Sales

Apple's quarterly earnings edged slightly higher in its quarterly report this past Thursday, despite another decrease in overall revenue. The results were buoyed by a standout performance from itsservices sector, which managed to offset a dip in iPhone sales.

While iPhone sales didn't meet expert predictions, Apple showed resilience in emerging markets, as demonstrated by a sales boost in China following a slump in the previous quarter.

For Apple's third fiscal quarter, profits were pegged at $19.9 billion—a modest 2.3% increase from the same period last year. On the other hand, revenues fell by 1.4% to $81.8 billion, marking the third consecutive quarter with a year-over-year drop.

Yet, it was not all doom and gloom for the tech powerhouse. Apple hit a record high in its services revenue, owing to income from the App Store, Apple Pay, Apple TV and other subscription services.

The wearables sector also saw a healthy increase in revenue. The Apple Watch enjoyed considerable success in China, indicating a growing interest in Apple's wider product range.

However, the company's iPhone sales saw a worrying 2.4% drop, given that these sales make up almost half of Apple's total revenue. Moreover, the company faced falling revenues from both the Mac and iPad.

As the smartphone market's growth shows signs of slowing, Apple confronts a challenging future. The high price tags on its devices mean it's becoming increasingly tough to convince customers to upgrade their devices as often. Some industry experts see these earnings as indicative of Apple's strategic pivot towards services as a key product.