Consumers find fewer reasons to upgrade their iPhones, say analysts, with newer models that offer only incremental improvements. The trend may continue this year, as Apple is likely to unveil a new slate of iPhones. The latest models, expected in September, are unlikely to work with the new fifth generation, or 5G, wireless technology that offers far faster download speeds than today's service. Apple is expected to have 5G iPhones for 2020, analysts said.
The other shrinking part of Apple's business has been China. Sales in the region that includes China fell almost 25 percent over the previous two quarters, triggering a sale of Apple shares in January. Apple partly blamed the fall in economic weakness in China.
"There were a lot of questions and uncertainty around China, so the fact that growth has improved over the year is probably a relief to investors," said Toni Sacconaghi, an analyst at Bernstein.
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The Chinese market, Apple's third largest for sale, has emerged as one of the company's biggest vulnerabilities, this month, Chinese officials revealed Growth had fallen to the slowest pace in three decades, with Apple also collecting most of its products in China, which has boosted the belief of President Trump, who has publicly pushed Apple to build more products in the United States.
Since 2013 Apple has made its top-of-the-line Mac Pro desktop computer in Texas, leading to headaches that delayed its launch, in June The Wall Street Journal and The New York Times reported that Apple would move the assembly of its new Mac Pro to China.
Last week, Apple sent requests to the U.S. Trade Representative's office requesting that components used in the Mac Pro, such as power cables and circuit boards, be excluded from tariffs. Apple said in its requests that it could not find the products outside of China.