Strong iPhone Sales for Apple; Tepid Holidays Expected

Apple which topped the $1 trillion mark on August 2 had a market value of $1.073 trillion at the close of trading on Thursday

Apple gathered all the negative attention past year when it was found to throttle older iPhones without notifying the users anywhere. The sales of iPhone in Q4 2018 failed to meet the analysts' expectations but generated enough of revenue to refrain critics from being so vocal.

All this is happening before China trade issues start to significantly bite making it even more hard for Apple to get the supplies it needs.

In August, the tech giant became the first $1 trillion publicly traded USA business, a milestone reached after it boosted revenue on higher-priced models such as the iPhone X. Yet just three months later, the company spooked investors by announcing it wouldn't disclose the closely watched iPhone sales figure. In third place on the revenue chart come the Mac computers, bringing in a decent $7.41 billion from 5.3 million units sold, while 9.7 million iPads chipped in with a "mere" $4 billion.

Why it matters: Apple has released its fiscal fourth quarter 2018 financial results.

For the quarter ended in September, Apple brought in $62.9 billion in revenue, beating expectations of $61.5 billion respectively. Though on the plus side the firm will be disclosing gross margins for the product and services businesses which should help understand how Apple is evolving to more of a ecosystem approach versus a pure hardware company. The positive results will please Apple's shareholders as well, as they'll be receiving $0.73 in cash dividends per share.

The world's most valuable company was a lot less valuable Friday, as a disappointing earnings report from Apple sent its shares tumbling and its total market value below $1 trillion. Since the beginning of 2016, the sales of iPhone has remained stagnated.

The iPhone growth is slowing down, but that hasn't affected Apple's revenue so far.

The contribution of iPhone to the worldwide smartphone shipments has been constantly declining as well.

Back to the Q4 2018 results, and Apple shared, as is usual, a breakdown of device and service sales units/revenue.

Cook was confident, however, that Apple will be able to get through the circumstances, as the company is armed with "our strongest line-up of products and services ever". Apple needed to act, and act fast.

But it was Apple's future guidance that spooked investors. If you don't want the notched look and don't care about the huge bezels on the 8 series, but want to save some money when purchasing an iPhone, this might just be for you.

On the call with analysts, Apple CEO Tim Cook tried to explain the decision to do away with unit sales figures by way of a grocery store analogy. Will people pay $2,000 for an iPhone?



Other news