Apple Inc on Tuesday reported an annual sales decline for the first time in fifteen years.

The tech giant had reported a record sales of $234 billion in 2015, which declined to $216 billion in the 2016 fiscal year which ended on September 30.

The decline in sales of the iPhone was the major factor in fall of annual sales of the company. iPhone accounts for two-thirds of all sales of the company.

Apple shipped 45.5 million iPhones in the third quarter of 2016, down from 48 million devices sold in Q3 of 2015.

The company’s sales and overall revenue had also declined in the first and second quarter compared to the same periods a year ago.

However, despite the decline in profits, Tim Cook, Apple’s chief executive, said: “Our strong September quarter results cap a very successful fiscal 2016 for Apple. We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2.”

China was once the biggest consumer of Apple’s products, but the company’s sales have declined 30% fell 30% a year-over-over year as it faces tough competition from local smartphone vendors like Huawei and Xiaomi.

“We are very bullish on China,” Cook said.

Apple shipped 45.5 million iPhones in the third quarter of 2016, down from 48 million devices sold in Q3 of 2015

Apple projects that it would post sales of $76 billion to $78 billion in the upcoming quarter, up from $74.8 billion in 2015.

Apple share, which had grown rapidly in the recent years, declined by 2.5% in after-hours trading following the release of the earnings report and closed at $118.50.

Apple released its flagship device iPhone 7, iPhone 7 Plus and Apple Watch Series 2 September.

Thomas Husson, an analyst at Forrester Research, said: “The new iPhone 7 devices were only on sale for few weeks during the quarter – so it is unlikely they were able to prevent quarterly iPhone sales to continue to decline. It will be key to get early performance indicators of how well the new devices sell ahead of the holiday season.

“ It is especially important in non-western markets like India where there is still significant growth. Overall, Apple is still significantly dependent on its iPhone product line but I would expect again a massive growth for new services like Apple Cloud, Apple Music or Apple Pay.”