iPhone sales dropped for a second consecutive quarter, Apple has reported.
However, the 15% drop was not as bad as analysts had feared.
Apple sold 40.4 million iPhones in its third quarter, slightly above forecasts of 40.02 million.
CEO Tim Cook said the results reflected “stronger customer demand… than we anticipated”.
Apple said it expected sales to fall again in Q4 to between $45.5 billion and $47.5 billion.
Demand for Apple’s flagship product has been slowing since the second quarter when the company reported the first drop in iPhone sales since their 2007 launch.
The iPhone makes up for around two-thirds of Apple’s sales and accounts for even more of its profits.
The slowdown in iPhone sales sent profit down 27% to $7.8 billion in the three months to June 25, while revenues fell 14.6% to $42.4 billion.
Apple’s sales in Greater China – defined by the company as China, Hong Kong and Taiwan – plunged 33%.
The company blamed economic uncertainty and people not upgrading their phones as often for the drop.
China accounts for almost a quarter of Apple’s sales, more than all of Europe combined.
Apple chief financial officer Luca Maestri said: “It is very clear that there are some signs of economic slowdown in China, and we will have to work through them.
“We understand China well and we remain very, very optimistic about the future there.”
Results were also hit by the impact of a stronger dollar.
Nonetheless, shares, which have fallen almost 20% over the past year, rose over 7% in after-hours trading because Apple’s overall performance was not as bad as analysts had expected.
Luca Maestri said comparisons to the second quarter of 2015, when iPhone 6 sales surged 35%, made its performance seem worse than it was.
He also pointed to its services business, which includes the App Store, Apple Pay, iCloud and other services, as a bright spot.
The division made nearly $6 billion in revenue, up 18.9% from the same time last year, and is now Apple’s second-largest sales generator after the iPhone.
