Apple on Tuesday reported a rebound in iPhone sales to lift the tech giant to record revenue in the past quarter in quarterly results that eased concerns of slowing growth.
The results showed strong demand for Apple’s iPhone 7 models launched last year, even as profits dipped 2.6 percent to $17.9 billion (Dh65.7 billion).
Revenue climbed to an all-time record $78.4 billion compared with $75.9 billion in the same period a year earlier, the company said in its earnings update for the fiscal first quarter ending in December.
Apple shares were up more than three percent to $125.19 in after-market trades that followed release of the earnings results.
Apple said that it sold 78.3 million iPhones — the most ever in a quarter — up five percent from the same prime holiday shopping period the prior year.
The growth promised to assuage concerns by investors that iPhone sales, which account for the bulk of Apple’s revenue, were softening due to three quarters of sequential decline.
“We’re thrilled to report that our holiday quarter results generated Apple’s highest quarterly revenue ever, and broke multiple records along the way,” Apple chief executive Tim Cook said in the earnings release.
“We sold more iPhones than ever before and set all-time revenue records for iPhone, services, Mac and Apple Watch.”
The amount of money taken in from online services and digital content grew strongly, led by unprecedented customer activity at Apple’s online App Store, according to Cook.
“I have not yet done the numbers, but I think Apple had the best quarter in the history of humanity,” Asymco analyst Horace Dediu said in a comment fired off on Twitter.
Apple, however, did see revenue in its important China market drop 12 percent to $16.2 billion, according to the earnings report.
iPhone 7 ‘a success’
Neil Saunders, managing director of the research firm GlobalData Retail, said Apple delivered a strong report and eased concerns it had hit a bump in growth.
“The iPhone 7 will be a much steadier contributor and we would argue that the new model has been a success,” Saunders said in a note to clients.
“While it is arguably not a groundbreaking step forward in terms of new features and functionality, it is clear that Apple did enough to stimulate interest and persuade many consumers to upgrade.”
But Saunders said Apple “cannot afford to take its eye off the ball,” noting that “competitors, including Google and Amazon, are still nipping at its heels with new products and ideas — so it needs to speed up, even if it is just to stand still.”
Some analysts say Apple remains too dependent on the iPhone and that it needs to better diversify its revenues amid a sputtering smartphone market and intense competition.
Apple said services revenue grew 18 percent from a year ago to $7.2 billion, while “other” products including the Apple Watch, brought in $4 billion.
“While the iPhone has been arguably the most successful profit driver in recent consumer electronic history, Apple’s dependence on sales of hardware to drive revenue is a future pitfall for the company,” said Colin Gillis of BGC Financial.