A significant contributor to this growth was the services division, which achieved record revenue of $24.2 billion, up from $21.2 billion year-over-year, and boasts over one billion paid subscriptions.

Despite the challenges, Apple continues to lead in personal technology innovation with its range of products, including the iPhone, iPad, and Mac.

Following the earnings report, major US stock indexes closed lower, with the Dow Jones Industrial Average dropping 1.2%, reflecting broader market volatility.

Apple's stock price experienced a slight decrease in after-hours trading but has gained approximately 18% in value since the start of the year.

Apple reported a 4.9% increase in revenue, reaching $85.78 billion for the fiscal third quarter ending June 29, surpassing analyst expectations of $84.53 billion.

Despite this overall revenue growth, iPhone sales saw a slight decline, reporting $39.3 billion, down from $39.67 billion year-on-year, although this was balanced by increased sales of Macs and iPads.

CEO Tim Cook noted that the decline in sales in China was less than 3% on a constant currency basis, which he described as an improvement compared to earlier in the fiscal year.

Investors remain cautious about iPhone sales performance in China, as fluctuations in exchange rates have previously affected Apple's stock price.

Apple faces ongoing challenges from economic headwinds and competition in China, necessitating a focus on managing AI development costs and appealing to price-sensitive consumers.

During the quarter, Tim Cook highlighted Apple's commitment to AI development, announcing the Apple Intelligence initiative and increased spending on AI technologies.

Executives will discuss the quarterly results in a conference call scheduled for 5 p.m. ET, providing further insights into the company's performance and future strategies.