"The lesson Apple's management has learned from the iPhone X, is when you sell a smartphone for more than US$1,000 you can sell fewer units and still reap the financial benefits", said analyst Thomas Forte from D.A. Davidson & Co. Revenue and earnings per share were both up (and over analyst expectations), and stocks have seen a modest bounce as investors jump back on the hype train.
Apple shares rose about 3.5 per cent in extended trading on Tuesday.
Shares in the Silicon Valley-based technology titan rose 3.96 per cent to US$197.83 in after-hours trade that followed release of the earnings figures, putting its market capitalisation at US$956 billion. The numbers were marginally lower that Wall Street estimates of around 41.7 million, but Apple made up for that decline with an increased average selling price, which stood at $724.
In fact, as the Apple-centric Six Colors blog pointed out, Apple's four-quarter rolling iPhone revenue is at an all-time peak, beating out even that late 2015/early 2016 period when seemingly everyone was upgrading to an iPhone 6.
Analysts had predicted that the average iPhone price would be $693. The iPhone's ASP is an important indicator of the kind of iPhones people bought in the quarter.
During a conference call with analysts, Cook said the iPhone X was the most popular iPhone in the fiscal third quarter, gaining market share around the world.
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The company made a stupendous $53.3 billion in revenue in the quarter, signifying a growth of 17% compared to the same period past year.
Apple on Tuesday reported higher quarterly earnings and revenue than expected, as iPhone sales climbed and revenue from services like the App Store hit a record high. But iPhone revenue jumped 20 percent to $29.9 billion - a reflection of the higher price Apple's iPhones command ever since the $999 iPhone X debuted late a year ago. The iPhone X features a brighter screen that spans the device from edge to edge, and boasts facial recognition technology for unlocking the device and other features. Samsung's Galaxy Note 9 launch, slated for next month, reportedly had to be sped up because of the tepid S9 sales.
Mr Maestri said the company's so-called "wearables" business - which includes the Apple Watch and its AirPods headphones, among other items - has generated $US10 billion in sales in the past 10 quarters and saw sales increase 60 per cent in the most recent quarter. Research firm IDC says that the iPhone is growing faster than the global smartphone market, according to Apple.
Services revenue was $9.5 billion, beating analyst expectations of $9.1 billion, according to Thomson Reuters I/B/E/S.
Apple's guidance towards fourth-quarter revenue is between $60 billion and $62 billion, way ahead of Wall Street estimates of $59.47 billion.
Revenue from the app store, music subscriptions and other services grew 31 per cent to United States dollars 9.5 billion, a record for Apple.