Sales of Apple’s iPhones fell at their steepest-ever rate during the three months to the end of March but are showing signs of stabilising.
The technology giant said revenue from the iPhone dropped by 17% to $31bn.
However, Apple chief executive Tim Cook said sales were stronger towards the end of March, including in China where it cut iPhone prices to boost demand.
Apple lifted its outlook for the three months to June, sending its shares over 5% higher in after-hours trading.
The company had warned on iPhones sales earlier this year, citing China where Apple competes with cheaper rivals such as Huawei Technologies and Xiaomi.
Mr Cook told Reuters that an improvement in demand for the iPhone in March as well as for products such as its watch, “give us some confidence that things are getting a bit better”.
Apple has lifted its guidance for its third quarter revenue to between $52.5bn and $54.5bn.
For the three months to March, total sales hit $58bn compared to analysts’ estimates of $57.3bn.
However, that is below total sales of $61.1bn in the second quarter last year. And while demand improved in China, sales in the region were still down by 20%.
Profits for the second quarter fell to $11.5bn compared to $13.8bn in the same period a year ago.
Apple is attempting to shift its reliance on the iPhone towards services and last month unveiled its new TV streaming platform, Apple TV+, to take on the likes of more established companies such as Netflix.
Services revenue rose to $11.4bn from $9.8bn in the same quarter last year.
But Yoram Wurmser, principal analyst at eMarketer, said long-term growth in services and, to a less extent, other devices “depend on having as many users as possible in the Apple ecosystem, and that’s still primarily about the iPhone”.
“The long-term growth of the company still depends directly and indirectly on iPhone sales,” he added.