In Apple's earnings report for the third quarter of its fiscal year, the company reported revenue of $42.4 billion and a net income of $7.8 billion, which is equivalent to $1.42 per diluted share.

In comparison, the company booked revenue of $49.6 billion and a net income of $10.7 billion, which is equivalent to $1.85 per diluted share, in the corresponding quarter of the previous fiscal year.

Analysts expected the company to post revenue of $42.1 billion, equivalent to a net income of $1.38 per share. Apple was able to beat these estimates, but only by a narrow margin.

"We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter," said Apple CEO Tim Cook.

Cook added that the launch of the iPhone SE was successful, and that the company was thrilled by the response of both customers and developers on the software and services that were unveiled at Apple's annual WWDC, which was held in June.

These statements, however, mask the fact that the sales of the company's flagship product, the iPhone, continued to decline, along with those of the Mac computer and the iPad tablet.

Apple reported sales of 40.4 million units of the iPhone for the quarter, compared to 47.5 million units in the third quarter of the previous fiscal year, which is equivalent to a 15 percent decline.

Sales of Macs were also down, with a decrease of 10.5 percent from 4.8 million units to 4.3 million units. Even sales of iPads were reported to be lower, despite the release of a huge update for the iPad Pro, at 10 million units compared to 10.9 million units, registering an 8.3 percent drop.

The company also reported a lower overall gross margin of 38 percent, compared to 39.7 percent in the third quarter of the previous fiscal year. This is most likely caused by the company's release of the iPhone SE, which packs similar components to the iPhone 6s but is being sold at a much lower price.

Instead of focusing on hardware, Apple is touting the performance of the services that it offers, which includes the App Store, Apple Music, iCloud and Apple Pay.

According to Apple CFO Luca Maestri, the company's services business saw a revenue increase of 19 percent compared to the third quarter of the previous fiscal year, up to $6 billion, with record sales from the App Store.

For the fourth quarter of its fiscal year, Apple is expecting to post revenue of between $45.5 billion and $47.5 billion, with a gross margin of between 37.5 percent and 38 percent. It remains to be seen whether Apple can hit these numbers if the sales performance of the iPhone continues to decline, which is a definite possibility according to a recent survey.

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