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Apple’s sales have declined for three consecutive quarters.

For the quarter ending July 1, Apple reported Thursday that its revenue fell 1%, to $81.8 billion, marking the world’s most valuable company’s third consecutive quarterly decline year over year.

There were, however, a few silver linings. The corporation reported $21.2 billion in services revenue, an all-time high. Apple is seeing significant growth in income from its services division, which includes Apple Music and Apple TV+.

Apple’s financial results also exceeded Wall Street’s revenue and profit forecasts, albeit just barely.

Sales of iPhones were $39.7 billion for the quarter, down around 2% from the same period last year. For the quarter, Mac sales were $6.8 billion, down 7%, while iPad sales fell nearly 20%, to $2 billion. (In the same quarter a year ago, Apple released the new iPad Air.)

Apple stock dropped more than one percent Thursday night. But since the beginning of the year, the stock price has increased by around 50%.

CEO Tim Cook praised the bright services number and solid growth in emerging regions in a statement released alongside the financial results.

Over one billion paid subscriptions helped push Services revenue to an all-time high in the June quarter, and the company witnessed sustained momentum in emerging economies thanks to healthy iPhone sales, as reported by CEO Tim Cook.

Thursday, Cook told investors on a call, “Constant challenges persist in the realm of macroeconomics, such as the approximately four percentage point drag that foreign exchange headwinds provide.”

Managing for the long term, “continuing to push the limits of what is possible, and always putting the customer at the center of everything we do,” is how Cook sees the company operating going forward.

The third quarter of the year, which begins in June, is often Apple’s slowest since the company waits until September to introduce new iPhone models. The release of a new model usually causes customers to put off an upgrade. This quarter will end before the busy back-to-school buying season and the profitable December holiday season.

After a brief uptick in the early days of the pandemic, PC and smartphone sales have begun to decline, as reported in the most recent earnings report. According to preliminary data from Gartner that was released last month, worldwide PC shipments dropped by 16.6 percent in the previous quarter. Meanwhile, preliminary data released last week by industry research firm IDC shows that worldwide smartphone shipments fell 7.8% last quarter compared to the same period the previous year.

“Like other big tech companies, Apple is feeling the negative effects of a worsening macro backdrop and ongoing supply chain problems,” Jesse Cohen, a senior analyst at Investing.com, said in a note Thursday evening. “However, Apple has done a better job of navigating through this difficult environment.” The market seems to be reacting to the fact that iPhone sales fell somewhat short of expectations, but I wouldn’t put too much stock in it until the new iPhone is out.

Ahead of the curve, On the call, Apple’s CFO Luca Maestri said the company anticipates “similar year-over-year revenue performance to the June quarter,” supposing the macroeconomic outlook doesn’t worsen. The September quarter ends on 30 September.

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