Apple's 4Q, change in iPhone sales disclosure jar investors
- Author: Anthony Vega Nov 05, 2018,
Nov 05, 2018, 1:50
Its fourth quarter results, covering the three months to October, showed Apple sold fewer iPhones than analysts had expected - nearly 47 million - but revenues and profits all smashed forecasts. Apple CEO Tim Cook cleverly suggested the clerk at the supermarket doesn't ask how many "units" are in the shopping cart.
In the Q4 2018, it sold 46.9 million units, which is almost identical to 46.7 million units sold past year in the same period.
Customers look at new Apple watches, including the Series 4, at an Apple store in NY.
However, the company's revenue has gone up.
"Skeptics will point to Apple doing this right at the critical juncture where higher [average selling prices] are making up for slower unit sales which remains the worry and the stock will get hit accordingly this morning", he added. Thanks to the higher average selling price of $793, 28% more than previous year, the Cupertino-based company was able to register the best September quarter revenue to date. The average selling price of iPhones was $793, well above analyst estimates of $750.78.
The iPhone XR is one of the few outliers from the trend of more costly Apple gadgets.
iPad unit sales amounted to 9.69 million, down 6 percent year-over-year. Excluding a one-time favourable adjustment of $640 million recognized in the fourth quarter of fiscal 2017, Services revenue grew from $7.9 billion in the fourth quarter of fiscal 2017 to $10 billion in the fourth quarter of fiscal 2018, an increase of 27 per cent. The iPhone maker boasted $62.9 billion in revenue, slightly more than the $60-62 billion it previously estimated, as well as $14.1 billion in profit, up from $11.5 billion in the previous quarter.
But Apple's strategy of charging higher prices for its phones has helped it to shrug off flagging demand.
Apple has long reported unit sales and revenue numbers for its major devices, such as the signature iPhone.
Apple's sales in its latest quarter and its estimates for the holiday season surprised experts.
When asked about how Apple plans to continue growing its services business, CFO Luca Maestri highlighted the "exponential trajectory" of all of Apple's services from Apple Music to the Apple Store to Apple Pay. In a surprise move, the firm announced during its investor earnings call that this will be the last quarter the company breaks out sales of iPhone, iPad and Mac, and will only be reporting total revenues in the future. "But some people may fear that this now means that the iPhone units are going to start going negative year-over-year because it's easy to talk about great things and not show the details of things that aren't so great".