Apple predicts iPhoneX will lift holiday sales to record

SAN FRANCISCO Apple Inc. forecast holiday sales that exceeded most analyst estimates, a sign it expects robust demand for the new iPhone X, the company’s most important product launch in years.

The 10-year anniversary iPhone will help push sales to a record high of US$84 billion to US$87 billion in the quarter ending in late December, Apple said in a statement. Analysts predicted revenue of US$84 billion, according to data compiled by Bloomberg. The previous record was US$78 billion during the holiday quarter of 2016.

The iPhone X has two headline innovations: an edge-to-edge display and a facial recognition system that uses 3D sensors. Both components have endured production problems, and analysts had been expecting limited supply of the phone when it goes on sale Friday in stores.

Production is “going well, we’re doing more each week and I’m pleased with how things are going,” chief executive Tim Cook said. “The initial demand for iPhone X has been very, very strong.”

The current six-week waiting time for online iPhone X orders will be reduced in the next two days as Apple adds more production capacity, he added.

Wait times were already falling Thursday in several major markets.

IPhones usually account for about two-thirds of Apple revenue and the devices are a hub for a growing suite of other products and services from the company. If the iPhone X is a big hit, that could fuel growth of offerings like Apple Music and iCloud storage.

Apple shares have hit records this week, with investors predicting demand for the handset will continue in future quarters. Soon after people started pre-ordering the iPhone X on Oct. 27, shipping times lengthened to as many as six weeks. That suggested strong demand and limited supply with Apple saying demand was “off the charts.” Long lines were already forming outside Apple retail stores ahead of the Friday launch.

“I’ve got goosebumps — it’s another great quarter, tremendous momentum and we’ve got the iPhone X to look forward to,” Hank Smith, chief investment officer at Haverford Trust, which owns Apple shares, said in a Bloomberg Television interview.

Apple also forecast a gross profit margin of 38 per cent to 38.5 per cent for the holiday quarter. Analysts were looking for 38.5 per cent.