Apple hopes rest on iPhoneX sales.
On the eve of the launch in stores of its deluxe iPhone X, the tech powerhouse predicts big sales coming and also posted quarterly results that blew past forecasts
Apple expects a Christmas feast this holiday-shopping season, thanks to in-store sales kicking off Friday for its deluxe iPhone X.
The Cupertino-based technology giant on Thursday forecast between $84 billion and $87 billion in revenue for the October-through-December quarter, showing bullish confidence in the iPhone X’s popularity.
“I couldn’t be more excited about Apple’s future,” said Apple CEO Tim Cook during a call with analysts to discuss the company’s quarterly earnings. “As we approach our holiday season, we expect it to be our biggest quarter ever.”
The prospects of strong demand for the new iPhone X and iPhone 8 seemed to wipe away memories of a previous iPhone sales slump. As recently as this May, Ap-
ple reported a decline in year-to-year iPhone sales, triggering questions about whether Apple was losing its mojo.
As Cook lauded his company’s performance during the Thursday earnings call, the iPhone X officially went on sale in Australia. Cook said several hundred people were waiting outside Sydney’s Apple Store to purchase the new phone.
The iPhone X will begin selling in U.S. stores on Friday.
Following the earnings results, Apple shares jumped around 3 percent higher in after-hours trading.
Its fiscal fourth- quarter results for July through September blew past analysts’ expectations.
Apple revealed it sold 46.7 million iPhones in the fourth quarter, up 3 percent from the same period a year earlier. That beat expectations for the sale of 46.1 million units.
Apple said iPhone sales rose to $28.85 billion, a 2 percent rise from a year earlier.
It is unclear how many of those sales were for the iPhone 8, which was announced on the same day as the iPhoneX, but released in September.
But Cook said that since the iPhone 8 and iPhone 8 Plus went on sale, they immediately became Apple’s best-selling iPhone models.
“That for us was a bit of a surprise, a positive surprise, obviously,” said Cook.
Apple’s revenue was $52.6 billion in the quarter, beating analyst estimates of $50.7 billion. Compared to a year earlier, Apple saw its revenue rise 12 percent.
The company posted quarterly earnings per share of $2.07, which were 20 cents above the average Wall Street estimate of $1.87, and 24 percent higher than a year earlier.
“The overall numbers are very solid,” said Creative Strategies President Tim Bajarin. “iPhone sales are a bit disappointing as they are up only 3 percent over same quarter last year, but I attribute much of that to many Apple buyers waiting to see the reviews of the iPhoneX.”
In past years, the newest iPhone models generally began selling in September or October, and the fourthquarter earnings allowed analysts to deduce possible holiday sales.
This year, there are some encouraging hints. Last Friday, iPhone X pre- orders sold out in 15 minutes, and backlogged demand pushed out shipping dates as far as six weeks. Despite reports of supply- chain problems, which left Apple with a limited iPhone X supply for the rest of 2017, the high demand buoyed Apple shares to an all-time high earlier this week of $169.04 and allowed analysts to muse about Apple’s presumed future as a trillion-dollar company.
“I think they are really crushing it going into an important product cycle with the iPhone X,” said Loup Ventures founder and longtime Apple watcher Gene Munster.
For Apple to reach the trillion-dollar mark, its service segment — which includes Apple Pay, Music, App Store and iCloud, among others— will be critical. This quarter was no exception in the services segment’s ever-rising growth: Apple reported $8.5 billion this quarter in revenue from services, a 34 percent boost from a year ago.
“Revenue from services continues to grow and is a good sign longer term,” said Creative Strategies analyst Carolina Milanesi. “This should be playing a bigger role in overall revenue.”
The fastest-growing segment in revenue for the quarter went to the “Other Products” category at 36 percent, propelled by a new AppleWatch, which has cellular connection, and a new Apple TV with 4K resolution compatibility.
Both iPad and Mac sales also showed double- digit growth in revenue from last year, with the former growing 14 percent and the latter growing 25 percent.
Apple’s growth in terms of geographic regions also showed promise. China, which has recently been Apple’s focus after it saw its iPhones slide in the past few quarters, saw12 percent growth from a year earlier in its revenue. However, Apple also noted an 11 percent decline in revenue from Japan.
“China was the star of the quarter,” said GBH Insights analyst Daniel Ives. “This crucial region appears to be finding its sea legs again and is the main ingredient in Apple’s recipe for success around iPhone X upgrades during 2018.”