IPhone sales off 5% as Apple reports income of $9 billion

Apple reported another quarter of falling iPhone sales Tuesday, underscoring worries that the company relies too heavily on a flagship product that’s running out of steam.

Apple sold 45.5 million iPhones, compared with 48 million in the same period last year, a drop of 5 percent. Shares fell in after-hours trading.

Many analysts expected iPhone sales to be soft, even with chief rival Samsung dealing with problems with its Galaxy Note 7 smartphones. But Apple has long-term problems with smartphone sales growth that can’t be offset by a short-term windfall. For example, revenue in China fell 30 percent from the yearago quarter.

In a statement, Apple CEO Tim Cook tried to focus attention on growth in the company’s services sector, which includes iTunes and the App Store.

“We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record,” he said.

The company reported better-than-expected financial results, with a quarterly income of $9 billion — giving it earnings of $1.67 a share, higher than the $1.65 analysts expected for its fourth quarter. Yet the firm posted $46.90 billion in revenue, vs. projections of $46.94 billion.

On a call with analysts, Cook highlighted the interconnectivity of Apple’s systems and the company’s ongoing investment in new technologies such as artificial intelligence and voiceactivated software.

But the iPhone still makes up 61 percent of Apple’s revenue, and no other Apple products saw sales growth from the same time last year. Revenue for the iPad unit was flat, while Mac revenue was down 17 percent. Revenue for “other products,” which include the Apple Watch and Apple TV, was down 22 percent.

Some analysts said investors shouldn’t read too much into the slower iPhone sales.

“Some reports will focus on Apple having a weak quarter, which ignores the fact that it continues to be the most profitable device maker on the planet and there seems little evidence that will end any time soon,” Ben Wood of analysis firm CCS Insight said in a note to investors ahead of Apple’s earnings report.