Apple profit stable at $20B as iPhone revenue slumps 15% in worst financial results in a decade

Apple hoped to offset slowing demand for iPhones by raising the prices of its most important product, but that strategy seems to have backfired after sales drooped during the holiday shopping season.

Apple profit in the final quarter of last year was $20 billion on revenue of $84.3 billion despite even as money from iPhone sales was down 15 percent from last year.

"While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter's results demonstrate that the underlying strength of our business runs deep and wide," chief executive Tim Cook said in the earnings release.

Now, CEO Cook is grappling with his toughest challenge since replacing co-founder Steve Jobs 7 ½ years ago. Even as he tries to boost iPhone sales, Cook also must prove that Apple can still thrive even if demand doesn't rebound.

Cook began tackling the test Tuesday with the release of Apple's quarterly earnings report, four weeks after he disclosed the company had missed its own revenue projections.

The update for Apple's first fiscal quarter to December 29 met the company's lowered guidance was greeted with relief on Wall Street , as shares rallied 3.5 percent in after-hours trade.

Apple had been under pressure to show it can weather the slump in the global smartphone market and diversify its revenue base.

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