Apple sold 1.7 million iPhones during the three months ended March 31, down from 2.3 million reported in the previous quarter.
It said its revenue share agreements with its network partners contributed to $378 million in revenue.
Apple chief financial officer Peter Oppenheimer said: "We remain confident of selling 10 million iPhones this calendar year. We sold 1.7 million iPhones during the March quarter and expanded our sales presence to Austria and Ireland.
"Total recognised revenue during the quarter from sales of iPhones, iPhone accessories and payments from carriers was $378 million. The total deferred revenue from the iPhone and Apple TV was $1.93 billion at the end of the March quarter, compared with $1.44 billion at the end of the December quarter."
He added:"Developer response to the iPhone 2.0 data software announced in March has been tremendous. Over 200,000 developers have signed up and downloaded the software development kit."