"The lesson Apple's management has learned from the iPhone X, is when you sell a smartphone for more than $1,000 you can sell fewer units and still reap the financial benefits", said analyst Thomas Forte from D.A. Davidson & Co. The results surpassed Wall Street expectations of $2.17 per share, the Associated Press reported.
A key area for Apple in its results will be iPhone sales - the company's flagship device. Apple's stock is up 3.2% in after-hours trading.
That said, iPhone and iPad sales were close to the same compared to this quarter a year ago, with 41.3 million iPhones shipped. No one seems to care about that, because the average selling price of the iPhone rose significantly (all thanks to the iPhone X), so the money-printing machine is still roaring ahead as usual.
Sales of iPhones in the fiscal third quarter have typically been tame as many fans have historically either bought handsets in prior months or end up waiting for new models in the months to come. In a note ahead of earnings, Andy Hargreaves of KeyBanc Capital Markets said that the "the risk of a direct impact from trade conflicts or increased nationalism among foreign consumers that damages worldwide iPhone demand" might offset potential gains for Apple. Overall, services revenue in the third quarter was $9.5 billion, against expectations of $9.1...
Apple's services business, which includes iTunes, Apple Music and iCloud among others, has been growing for years and could become the company's main revenue generator as iPhone sales plateau. The company posted revenue of $53.3 billion. That's because the pricy iPhone X has been performing well; it has consistently been the best-selling iPhone since it launched last November. The Mac sales were down by 13 percent to 3.7 million units while the revenue declined by 5 percent to $5.3 billion.
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Apple has responded to a plateauing global smartphone market by launching ever-more expensive phones and diversifying into services. At almost $10 billion (let's just round for convenience), Services is making up almost 20% of Apple's $53.3 billion in total revenue.
"Our Q3 results were driven by continued strong sales of iPhone, services and wearables, and we are very excited about the products and services in our pipeline", CEO Tim Cook said in a statement accompanying the results.
Finally, while Cook expressed opposition to new trade tariffs between the U.S. and China, noting how they're anti-consumer, he said that Apple is continuing to see double digit growth in China along with other major markets.
Cook told analysts that Apple is on track to meet a goal of doubling Services revenue by 2020. Eight analysts surveyed by Zacks had expected $52.4 billion in revenue for the quarter.