Apple posted better earnings and revenue than Wall Street expected for the March 2019 quarter -- even as sales of its flagship iPhones were $6.5 billion lighter in the period, down by 17 percent.
iPhones sales fell at their steepest-ever rate during the three months to the end of March but are showing signs of stabilising, the BBC reported.
Apple lifted its outlook for the three months to June, sending its shares over 5 percent 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.
Apple chief executive Tim Cook though said sales were stronger towards the end of March, including in China where it cut iPhone prices to boost demand.
For the quarter ended March 30, which is Apple's fiscal year 2019 second quarter, the company reported revenue of $58.0 billion, down 5 percent from the year-ago quarter, and earnings per diluted share of $2.46, down 10 percent.
Wall Street analysts' consensus estimates had projected Apple to report revenue of $57.37 billion and EPS of $2.36. Apple's stock rose over 5 percent in after-hours trading.
While iPhone revenue fell, to $31.05 billion, Apple's Services segment -- which includes the App Store, Apple Music, iCloud, Apple Care and Apple Pay -- generated quarterly record revenue of $11.5 billion, up 16 percent.
According to the CEO, Apple had 39 crore paid subscriptions at the end of March, up 3 crore in the last quarter.
Apple is also 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 $11.4 billion from $9.8 billion in the same quarter last year.