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iPhone sales are down again, but Apple’s Services division is exploding

iPhone sales continue to slide as Apple announced a third straight quarter of slumping revenues. However, the soaring Services division continues to paper over hardware cracks.

Cupertino sold 45.51m iPhones during the three months ending September 30, which is down 5.2 per cent on the same period last year. Revenue dropped off 9% year-on-year, to $46.9 billion.

Today’s report only includes one week of iPhone 7 sales, so the figure is by no means a reflection on how those devices are selling.

Related: iPhone 7 review

For what it’s worth, CEO Tim Cook said said he was “thrilled” with the reception and told shareholders he expects iPhone 7 stocks to bounce back in the run up to the holidays. iPhone 7 Plus sales might take a little longer to reach equilibrium, he said.

However, in more hardware-related woes, iPad sales are down 6% and Macs 14%, although the latter can expect a boost in the next quarter with the expected release of the MacBook Pro refresh.

Of course, Apple offered no specifics on the Apple Watch.

It wasn’t all doom and gloom for though. The exploding Services division (Apple Pay, App Store, Apple Music, iCloud, etc.) was up 24% to hit all-time record revenues of $6.3 billion.

Apple Pay, for instance, enjoyed more transactions in the last three months than in the entirety of 2015, with transactions up 500% year on year. Music revenue was up 22%.

Cook suggested there’ll be a return to growth when Apple reports the holiday quarter results at the end of January.

Video: iPhone 7 vs iPhone 8 – Head-to-Head

Will the rapid increase in Apple’s services business eventually offset the inevitable slowing of iPhone sales? Share your thoughts below.

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