Apple earnings Q4 2016: Apple beats estimates and iPhone revenue tops expectations despite lull in sales

Apple reported its fourth quarter earnings this past Tuesday and achieved better than expected results.

Reports indicate that the tech giant achieved a total revenue of $46.9 billion USD, a net income of $9 billion and reached $1.67 per share. Furthermore, Apple reported over 45.51 million iPhones sold in the three months leading up to September 24.

“Our strong September quarter results cap a very successful fiscal 2016 for Apple,” said Apple CEO Tim Cook in a statement.

“We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record.”

Despite these sales beating analysts’ estimates, this is the third quarter in a row of falling iPhone sales, having sold over 48 million iPhones this time last year. This represents a 13 percent sequential increase but a five percent annual drop in the number of units sold.

On an earnings call, Cook claims that the iPhone 7 and iPhone 7 Plus have been a huge success, which reportedly saw demand outpace supply on many occasions. This was true in Canada where the iPhone Plus was initially sold out in many locations.

The iPhone isn’t the only Apple device that experienced an annual decline. In addition, both the MacBook and iPad product lines experienced decreases in units sold. While iPad products saw an annual decrease in units sold by six percent, the MacBook product line saw an annual decrease of 14 percent.

Apple did not provide specific revenues for the Apple Watch Series 2, but said it experienced a 22 percent decrease in revenue from its “other product” section year over year.

Despite the company’s quarterly growth, it’s important to note that this is the first time since 2001 that Apple’s annual revenue has fallen. Revenue from this quarter fell approximately nine percent year over year to $51.5 billion with a net income of $11.1 billion. Apple reported that 62 percent of this quarter’s revenue can be credited to international sales.

While several of their international markets experienced significant growth rates this past quarter, China stood out as an area of unusual decline. As per Apple’s earnings report, the company saw its revenues in China decrease 30 percent year over year from $12.5 billion to $8.7 billion.

Another area of growth covered in the earnings call included Apple Pay, which Tim Cook claimed has increased in use by over 500 percent. Apple Pay expanded its presence in Canada this past year and is now used by all the major Canadian banks.

More Apple Pay transactions were apparently completed in September of 2016 than were completed in all of the 2016 fiscal year. Apple Pay went live in Japan yesterday and will be going live in Spain in the near future.

Cook then went on to discuss the vision of the company in a more general sense. The CEO didn’t confirm or deny Project Titan, saying that he “can’t speak about rumours.” He did however say that the company is “always looking at new things.”

“The car space is an area in general where it’s clear there’s a lot of technology that will either become available or will be able to revolutionize the car experience so it’s interesting from that point of view but nothing to announce today.”

He did note however that research and developments spending has shot up due to investments in products that are not yet on the market. It was recently revealed that Apple is working on a portion of its car project from an office in Kanata, Ottawa, just a few minutes from BlackBerry-owned QNX.

In terms of voice assistants virtual assistants similar to Amazon’s Echo, Cook hinted that Apple won’t be going the route of a home assistant. He stated in during the call that living in a mobile world requires a virtual assistant to be mobile in order to be useful. It’s important to note however that he didn’t entirely dismiss the possibility.

On the topic of artificial intelligence, Cook discussed the merits of privacy versus machine learning. He stated that Apple customers wouldn’t have to give up privacy to reap the benefits of machine learning, addressing a argument that’s been brewing in the tech space since the commercialization of artificial intelligence, as well as the commentary surrounding Google’s new Assistant.

“I think it’s a false trade-off that people would like you to believe that you have to give up privacy to have AI do something for you. We don’t buy that. It’s sort of like the age old argument of privacy vs. security. We should have both. It shouldn’t be making a choice,” he concluded.

Apple has forecast that in the upcoming quarter will earn between $76 and $78 billion in revenue, likely due to the bustling holiday shopping season.

Related: Everything we know about Apple’s ‘Hello Again mac event