iPhone Q1 Sales Drop 15 Percent, Apple’s Stock Still Jumps 5 Percent on Record Services Revenue

“We don’t measure our success in 90 day increments,” CEO Tim Cook says after lagging sales of its trademark device

Apple reported a 15 percent year-over-year decrease in iPhone revenue when the tech giant shared its Q1 earnings on Tuesday afternoon, with CEO Tim Cook blaming poor market conditions in China as the driving force behind the drop.

Despite the lagging sales of its signature device, though, Apple shares jumped more than 5 percent in after-hours trading, hitting $163 per share, as the company posted $84.3 billion in quarterly revenue and earnings per share of $4.18, narrowly edging past analyst estimates.

Offsetting the drop in iPhone revenue was a company-record $10.9 billion in Services revenue, stemming from its catch-all division that includes Apple Music, iCloud storage, Apple Pay, and iTunes and App Store purchases. On the company’s earnings call Thursday afternoon, Cook boasted that Apple’s services division, with more than $40 billion in revenue last year, is five times larger than it was in 2010.

Expectations for the quarter had been dampened earlier this month when Cook warned underwhelming iPhone sales had spurred Apple to make the rare decision to lower its revenue guidance for the quarter by several billion dollars. The iPhone still accounted for $51.98 billion in sales during the first quarter, Apple reported. This was the first quarterly report since Apple announced it would stop sharing iPhone device sales, in favor of simply reporting how much revenue was generated.

“We don’t measure our success in 90-day increments,” Cook said on the company’s earnings call. He then pointed to the three aspects of the company — customer satisfaction, its growing activation base, and Apple’s “culture of innovation” — that, in his eyes, ultimately show it’s health.

Apple’s fastest-growing category was its Wearables, Home and Accessories division, which grew 33 percent year-over-year and brought in $7.3 billion — only $100 million less than Mac sales accounted for. The division has become one of Cook’s favorites to talk about in the last year, as the chief executive has championed the Apple Watch’s ability to spot heart issues.

There was nothing mentioned of Apple’s upcoming content push; earlier on Tuesday, The Information reported Apple plans to rollout its streaming service in April.

And for investors that keep an eye on Apple’s massive cash hoard, the company closed December with $245 billion in cash and $115 billion in debt.