Apple reported sales of 45.5 million phones in the fourth quarter, down from 48 million during the same period in 2015. Although sales rose compared with the previous quarter in 2016 from 40.4 million.
It is the third quarter in a row that Apple has reported a year-on-year drop in sales of the phone.
The tech giant also reported a 10.3% fall in net revenue from $51.5bn (£42.3bn) in the fourth quarter last year to $46.9bn in the current period. Period on period, net sales increased 10.6% from $42.4bn in the three months to 25 June.
Tim Cook, the chief executive at Apple, 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, as well as the incredible momentum of our Services business, where revenue grew 24% to set another all-time record."