APPLE Inc. yesterday posted a third quarter in a row of declining iPhone sales, but beat Wall Street targets for its flagship product and forecast higher-than-expected revenue for the critical holiday shopping season.

    Apple executives said demand for the new iPhone 7, the company’s best hope to revive flagging sales, was strong, despite fiscal fourth-quarter revenue dips in China and the Americas, its two most important markets.

    Chief financial officer Luca Maestri said it was “impossible to know” if there was any effect yet from rival Samsung Electronics halting production of its fire-prone Galaxy Note 7 phones earlier this month.

    Apple said it sold 45.51 million iPhones in the three months ended Sept. 24, beating the average analysts’ estimate of 44.8 million, according to research firm FactSet StreetAccount.

    Revenue fell 9 percent to US$46.85 billion, a touch behind Wall Street targets.

    “Apple didn’t have a great [fourth quarter] as iPhones, Macs, China, the United States and what appears to be Watch were down,” said Patrick Moorhead, an analyst at Moor Insights & Strategy.

    Revenue from greater China, once seen as Apple’s next growth engine, fell almost 30 percent in the quarter, after dropping 33 percent in the preceding period. Revenue from greater China doubled in the year-earlier quarter.

    Apple also forecast gross profit margins slightly behind Wall Street targets, projecting 38 to 38.5 percent, versus expectation of closer to 39 percent, said Mariann Montagne, senior investment analyst and portfolio manager at Gradient Investments.

    “I think people were a bit surprised that they were so conservative there,” said Montagne, whose firm holds Apple shares.

    The stock hit a 12-month low of US$89.47 in May but has been on an uptrend since then as investor confidence returned.

    Apple forecast revenue of between US$76 billion and US$78 billion for the current quarter. Analysts, on average, had expected US$75.08 billion.

    That meant annual revenue fell for the first time since 2001, highlighting the slowdown in the smartphone market as well as intensifying competition, particularly from Chinese rivals.

    Apple is still optimistic about its business in China, CFO Maestri said. While gross domestic product growth in China has slowed, the economy is growing nonetheless, the middle class is expanding and smartphone ownership remains low, he said. (SD-Agencies)