Apple profits drop despite iPhone sales surge

Tech giant Apple saw profits fall for the third consecutive quarter as it reported its full-year results, although iPhone sales continued to rise.

Apple reported a fourth quarter profit of $7.5bn (£4.6bn), a 9% fall, beating analysts' expectations, but reported margins fell because of rising production costs. Annual profits dropped to $37bn from $41.7bn the previous year, its first earnings decline in 11 years, although iPhone sales rose 26% to 33.8 million. Chief executive Tim Cook insisted the business is "stronger than ever" on an earnings call, and predicted an "iPad Christmas". However, analysts were disappointed by forward guidance given by the company, indicating future profits might continue to slide. Apple said it...