Apple says sales fell in the first quarter

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																	Top Apple insider claims iPhone demand isn’t as low as everyone says					
								
			
	
		Yoni Heisler

Apple had warned at the beginning of the month that emerging markets and the economic slowdown in China were presenting challenges to iPhone sales.

While iPhone revenue declined 15 percent in the quarter from the period a year earlier, sales increased for all other product categories, the company said.

Apple shares rose nearly 4 percent in extended trading on Tuesday.

Despite all that, CEO Tim Cook looked to put the best possible spin on Apple's results, noting the company saw record highs in revenue for its Mac and wearables business. iPad revenue was up 17 percent for the quarter, the best rate for its tablets in six years. Revenue from the iPhone declined 15% from the year-ago quarter, but total revenue from all other products and services grew 19%.

"We are as confident as ever in the fundamental strength of our business", Cook told investors. "We're not taking our foot off the gas".

In response, Apple is considering adjusting its smartphone prices in other markets, per Reuters (via The Verge): in today's earnings call, Cook described a 33% depreciation in the lira, Turkey's currency, which resulted in a $700 million drop in revenue from the country compared to this point a year ago.

Currency exchange rates were a big culprit, particularly with Apple's China business. Cook noted in a conference call Tuesday that "the relative strength of the U.S. dollar has made our products more expensive in many parts of the world". The iPhone provides roughly two-thirds of Apple's revenue.

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"We generated very strong operating cash flow of $26.7 billion during the December quarter and set an all-time EPS record of $4.18", said Luca Maestri, Apple's CFO. That would bring prices closer to where they were a year earlier - in other words, they're price cuts. "If your last purchase was a 6S or 6, or even a 7, you may have paid $199 and obviously in the unbundled world it is much more than that". That unexpected move raised suspicions that Apple was trying to hide a forthcoming slump in iPhone sales - fears that were realized during the holiday season. Instead of upgrading to a new iPhone during the quarter, current iPhone users opted for a less expensive battery replacement that would let them hold onto their older iPhone longer.

What about Apple's shiny new streaming service? The company's active installed base ended 2018 at an all-time high, with 1.4 billion devices. Analysts expect the number of iPhones sold in the March period will decline at the steepest level in the company's history.

Services revenue. Apple reported $10.9 billion.

But that optimistic outlook can only take Apple so far.

The Cupertino, California-based company said fiscal second-quarter revenue will be between $55 billion and $59 billion.

Don't expect Apple to lay the blame on lackluster upgrades, at least not publicly. Local smartphone rivals like Huawei Technologies and Xiaomi are increasingly releasing lower-priced, feature-rich alternatives to the iPhone. From the way Cook spoke during today's call, that sounds like a program will keep in place going froward. It plans to roll out those efforts to more countries. Apple last quarter announced that they would no longer be disclosing iPhone unit sales.

Cook said Apple is rethinking how it prices the iPhone outside the United States after largely setting the price in US dollars, which made the phones more expensive in local currencies.

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