Apple earnings beat expectations as it sells pricier iPhones

Apple's fourth-quarter forecast will give clues to when the new iPhones will debut say

Analysts are predicting iPhone sales to be up slightly on a year ago, but revenue to rise further thanks to the higher price of the iPhone X, which Apple said, when announcing its last set of results, was its best-selling phone.

By the time Apple takes the wraps off its new iPhones this fall, most people in the crowd will already be able to draw the phones from memory at the rate leaked images of the devices are appearing.A day after photos of dummy iPhone units popped up online, videos of those same two models are now circulating.

The iPhone maker's market capitalisation is just under $950 billion USA dollars, meaning it would need stock prices to rise around 7% to pass the trillion-dollar mark. Revenue did drop by 13% compared to the previous quarter, and that may largely be attributed to declining iPhone sales as buyers wait for the company's refreshed lineup of handsets sometime later this year. The company's family of slates brought in $4.7 billion in revenue, down 5% on the year, suggesting the latest entry-level iPad's $329 starting price might be eating into the iPad's overall slice of the revenue pie a bit. If it does, Apple will be the first United States company to pass the trillion dollar milestone.

Also significant is a continued growth in the company's non-hardware revenue: Apple generated $9.55 billion with services during its fiscal Q3, compared to $7.23 billion a year ago. The category includes the App Store, Apple Music, iCloud storage and Apple Pay.




But the average iPhone selling price hit $724, well above the expected $694. Apple also regained growth in China, where sales rose 19 percent.

Analysts were looking for 41.6 million iPhone units in the quarter, and an average selling price of US$699, according to estimates compiled by Bloomberg News. The company is expected to launch three new phones later this year. That's in line with the company's recent forecast and translates to year-over-year revenue growth of about 15 percent, the strongest for Apple's June quarter since 2015.

Apart from consumer behavior, there is also concern that Apple's extensive overseas manufacturing operation may suffer from trade disputes between the US and China. The revenue included US$236 million from resolving lawsuits such as Apple's long-running dispute with Samsung Electronics Co Ltd. The category includes AirPods headphones, the Apple Watch, Apple TV, and the HomePod.

Apple said it expects operating expenses of $7.95 billion to $8.05 billion in the fourth quarter, compared with analyst estimates of $7.8 billion, according to Thomson Reuters I/B/E/S.

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