NEW YORK (CNNMoney) — For 13 years, Apple wowed investors with consistent sales growth fueled by the iPod, iPad and, more than anything else, the iPhone — which now accounts for the majority of the company’s revenue.
Apple posted sales of $42.4 billion for the quarter that ended in June, down from $49.6 billion a year earlier, according to the earnings report on Tuesday. The company’s profits also fell by more than 25% from the same period a year earlier.
That marks the second straight quarter where Apple’s sales have declined year-over-year as iPhone sales peter out.
Sales of the iPhone fell to 40.4 million units, down from 48 million a year earlier. On the bright side, Apple’s sales declined a little less than Wall Street had expected, sending the stock up 5% in after hours trading.
Welcome to the new Apple, where success is defined as not having sales fall even more.
Customers are taking longer to upgrade their phones, sales in China are slowing and many have raised concerns that the global smartphone market is saturated.
Colin Gillis, an analyst with BGC Partners, went so far as to pen a “haiku” in an investor note this week: “It has become clear, that the muse that drove Apple, has gone somewhere else.”
This quarter is typically Apple’s weakest of the year. It is the last one before the next iPhone model is released in the fall.
“We don’t expect this report to serve as a meaningful catalyst for the stock, as all eyes are on the iPhone 7 launch in September,” Simona Jankowski, an analyst with Goldman Sachs, wrote in a note ahead of the earnings report.
Apple will reportedly break with its usual strategy of overhauling the iPhone every two years. The next generation iPhone is expected to ditch the headphone jack, but otherwise only receive small tweaks compared to the models on the market.