iPhone Hits 1B Sold as Apple Plans Big Things for Augmented Reality

Apple just sold its 1 billionth iPhone, a ground-breaking device that changed mobile phones as we knew them and created mass competition.

Apple, iPhone, augmented reality, AR, Pokemon GO, smartphones, revenue, Tim Cook

A day after Apple announced that its global iPhone sales were down 15 percent, taking down revenue and profits with them, CEO Tim Cook met with employees to share the news that the company had just sold its one billionth iPhone.

It was indeed an ironic moment for the iPhone, which first went on sale in 2007.

"iPhone has become one of the most important, world-changing and successful products in history," Cook told Apple employees at the meeting in the company's Cupertino, Calif., offices on July 27. "It's become more than a constant companion. iPhone is truly an essential part of our daily life and enables much of what we do throughout the day."

The one billionth iPhone was actually sold last week by the company, according to Cook, but the announcement of the "major milestone" was saved until the day following the company's third-quarter earnings call, which was held on July 26.

"We never set out to make the most, but we've always set out to make the best products that make a difference," he said. "Thank you to everyone at Apple for helping change the world every day."

'High on AR'

It's been a busy couple of days for Cook, who also talked about the company's future plans for augmented reality when he was asked about the recent success of the Pokémon Go game app by a financial analyst during the Q3 earnings call.

"In terms of AR and the Pokémon phenomenon, it's incredible what happened there," said Cook. "I think it's a testament to what happens with innovative apps and the whole ecosystem and the power of being a developer being able to press a button, so to speak, and offer their product around the world."

The huge popularity of the game also shows that "AR can be really great," said Cook. "And we have been and continue to invest a lot in this. We are high on AR for the long run. We think there are great things for customers and a great commercial opportunity."

For Apple, "the No. 1 thing is to make sure our products work well with other developers' … products like Pokémon" as the company works on its AR strategy, he said.

Asked if the rise of AR means that computing will be shifting to a deeper relationship with the technology, Cook was philosophical. "I notice that people want to call it a new computing platform. I think there's a tendency in this industry to call everything new, [as the] the next computing platform. However, that said, I think AR can be huge. So we'll see whether it's the next computing platform, but regardless it will be huge."

Even though Apple's revenue and profit were down for the third quarter, the company is still a huge powerhouse of sales and profit. The company reported $42.36 billion in revenue, down 15 percent from $49.6 billion a year earlier, and $7.8 billion in net income, a drop from $10.7 billion.

The company's Q3 revenue of $42.36 billion did, however, beat the $42.1 billion estimates of an average of 36 analysts surveyed by Thomson Reuters. Third-quarter earnings per basic share came in at $1.43, down from $1.86 per share in 2015.

Apple's year-over-year declines in revenue and net income for two straight quarters contrast with the company's prior string of 13 years of quarterly revenue reports without a decline, dating back to 2003. Bringing that streak to a halt, the company reported revenue of $50.6 billion in the second quarter ended in April, 13 percent lower than the $58 billion the company posted a year prior.

Hitting the company's revenue and net income hard were a 15 percent drop in global iPhone sales to 40.4 million units in the quarter, down from 47.5 million in the third quarter of 2015. Sales of iPads dropped 9 percent to 9.95 million from 10.9 million a year ago, while Mac sales fell by 11 percent to 4.3 million from 4.8 million one year ago.

Apple's revenue from U.S. sales fell 11 percent in the quarter to $18 billion from $20.2 billion one year ago, while its revenue in China dropped 33 percent to $8.8 billion from $13.2 billion in the third quarter of 2015.