Average iPhone price propels Apple stock, profits

Apple made more money from higher priced iPhones in the latest quarter, even as unit sales were relatively unchanged.

Shares of Apple rose nearly three per cent Tuesday after it reported fiscal third-quarter results that beat Wall Street expectations. Unit volume rose one per cent from a year ago to 41.3 million, which was expected, but the average selling price grew 20 per cent to $724 US per iPhone, up from $606 a year ago.

That suggests that more consumers were buying its premium iPhone X, which starts at $1,319 Cdn in Canada. The iPhone X features a screen that spans the device from edge to edge, and has facial recognition technology for unlocking the device.

But while iPhone X costs a few hundred dollars more than previous iPhones, Apple’s base models — the iPhone 8 and 8 Plus — had price increases compared with their predecessors.

Revenue from the app store, music subscriptions and other services grew 31 per cent to $9.5 billion US, a record for Apple. The figure included a one-time gain of $236 million in connection with resolving various lawsuits, which the company didn’t specify. During the quarter, Apple settled a long-running patent battle with Samsung.

Apple reported a 37 per cent increase, to $3.7 billion, in the division for miscellaneous hardware, including Apple Watch and the HomePod smart speaker. But Apple saw revenue declines in both the iPad and Mac computers.

Apple said net income rose 32 per cent to $11.52 billion, or $2.34 per share. That beat the $2.17 per share expected by 10 analysts.

The maker of iPhones, iPads and other products posted revenue of $53.27 billion, up 17 per cent, also exceeding Street forecasts for revenue of $52.37 billion.

For the current quarter ending in September, Apple said it expects revenue of $60 billion to $62 billion.

Apple shares have climbed 12 per cent since the beginning of the year, while the Standard & Poor’s 500 index has climbed slightly more than five per cent. In the final minutes of trading on Tuesday, shares hit $190.29, a climb of 28 per cent in the past 12 months.