Apple profits dive but shares rise even as iPhone sales stall

Apple’s profits dropped 27% in the second quarter of the year - partly driven by sales in China falling by a third. The world’s most valuable publicly-traded company reported profits of $7.8bn (£5.9bn) on revenues of $42.4bn (£32.2bn) between April and June. The focus was on iPhone sales after Apple endured a first quarterly decline in the previous three months - Apple confirming a fall of 15% to 40.4 million units in its latest trading period. The iPhone is crucial for Apple as it still accounts for two-thirds of its revenue.

They are running behind, and they are trying to catch up both in perception but also in fact.

Oren Etzioni, who is CEO of the Allen Institute for Artificial Intelligence

It admitted that the economic slowdown, particularly in China, meant a growing number of consumers were failing to upgrade their iPhone models. Some analysts also pointed to rivals raising their game. Patrick Moorhead, of Moor Insights & Strategy, said: “Samsung and Huawei are much more competitive now than a year ago.” Apple has encountered a number of regulatory problems in China but said it was working with authorities to restore its stores for books and movies after they were taken down by the authorities - insisting they were yielding less than $1m at the time. The company pointed to growth in India as one of the rare bright spots, with iPhone sales rising 51%.