As iPhone sales declined for the second straight quarter, Apple CEO Tim Cook said that his company is working on artificial intelligence and augmented reality. Raving about hit smartphone game Pokemon GO, Cook stressed that Apple is "high on [augmented reality] for the long-run" and investing heavily.

Cook also highlighted Apple’s investment in artificial intelligence, which the company now uses to recommend content to users and even spot usage patterns to improve a device's battery life.

"We have been and continue to invest a lot in this," Cook said. "We think there’s great things for customers and a great commercial opportunity."

Apple also reported results for the third quarter. The company said it sold 40.4 million iPhones in the third quarter, down 15 percent from the year-ago quarter. IPhone sales dropped for the second straight quarter, pushing down Apple's total revenue 14.6 percent in the fiscal third quarter, ended June 25.

Demand for Apple's phones has waned in China, partly because of economic uncertainty there.

Tim Cook said during a call with analysts that the iPhone SE, a cheaper, four-inch phone released this year, was extending the range of people able to buy Apple phones.

Apple's Services business grew 19 percent year-over-year and App Store revenue was the highest ever, said Luca Maestri, Apple’s CFO.

Apple's quarterly net profit fell 27 percent to $7.8 billion, while revenue was $42.36 billion.