Apple's years-long winning streak finally ended on Tuesday.

For the first time in 13 years, Apple reported that it made less money in the last quarter than it had in the same quarter of the previous year.

The company said that it pulled in $50.6 billion in sales, falling short of analysts' already lowered expectations of $52.02 billion, and the $58 billion it made in the same quarter last year. It also netted $10.5 billion in profits compared to an expectation of $11.1 billion and $13.6 billion in the same quarter last year.

The results don't come as a surprise to analysts and investors. Apple had already forecast tepid results for the quarter during last quarter's earnings call, and most Apple watchers were bracing for the worst.

Only one number really matters when it comes to gauging Apple's performance — iPhone sales. The company makes a lot of different things, but it's the iPhone that accounts for more than two thirds of Apple's sales.



iPad sales have been in steady decline since a high point in 2014, and the Apple Watch business hasn't taken off as much as it was expected to despite growing to a billion-dollar moneymaker.

Unfortunately for Apple, the market for smartphones is slowing down in many developed countries, and price wars and economic instability are hurting demand for iPhones in emerging markets.

Apple reported that it sold 51.2 million iPhones in the past three months — just barely beating the 50.7 million that analysts expected. That's the first time since the iPhone was first rolled out in 2007 that its sales declined.

Investors responded on Tuesday by sending Apple shares plummeting after already sliding in the hours leading up to the news. As of Tuesday afternoon, the stock was trading down nearly 8% for the day.

Things aren't likely to get better next quarter either, according to CEO Tim Cook's dour forecast. The company predicts between $41 billion and $43 billion for the current quarter — compared to the $49.6 billion it made last year.

Cook admitted on Tuesday's earnings call that the past quarter was a "challenging" one but stressed the bigger picture of growing iPhone sales — emphasizing an 80% increase in users in the last two years.

One bright spot of the last three months, he said, was a 50% boost in the iPhone business in India.

"The future of Apple is very bright," Cook told investors on Tuesday. "Our product pipeline has major innovation in store."

Apple is in some ways the victim of its own monstrous success when it comes to the disappointment around the decline.

To keep the results in perspective, Apple is still the richest and most profitable company in the world with a record war chest of more than $200 billion in cash and quarterly revenues that eclipse the entire market value of most Fortune 500 companies.

Yet this downturn has been expected for some time now. Despite posting some of the most profitable quarters in corporate history and sustaining an impressive growth streak, Wall Street has constantly fretted over the company's dependence on iPhones, the lack of innovative new lines of revenue and economic slowdown in China — where Apple makes a huge chunk of its money.

Each time, Apple had managed to buck those pessimistic expectations. Yet now it seems those long-held fears may finally have been partially realized.

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