UPDATED 23:16 EDT / MAY 01 2018

APPS

Apple books solid financials thanks to iPhone X sales in China

Apple Inc. today announced a solid first quarter of the year on strong iPhone X sales in China, despite various reports that the company may be set to cease production of the model later this year.

For the quarter ending March 31, Apple posted revenue of $61.1 billion, up 16 percent from a year ago. Profit per share came in at $2.73, up 30 percent from a year ago.

International sales led Apple’s growth, accounting for 65 percent of its first-quarter revenue, with a surge of interest in the brand in China, a country Apple has been going backwards in for a number of years, accounting for much of the growth.

Surprisingly to nearly everyone, sales of the iPhone X (pictured) in the Middle Kingdom led Apple’s sales surge. Chief Executive Officer Tim Cook said the pricey model “was the most popular smartphone in all of China last quarter.” Overall, iPhone sales remained relatively flat, coming in at 52.2 million, below analysts’ prediction of 54 million units but up from 50.7 million units a year ago.

Although iPhone sales were healthy, the same can’t be said for Apple’s other lines. Once again, iPad sales declined in the quarter, to 9.1 million units compared with 13 million units in the last quarter of 2017. Sales of Apple’s Mac computers, once the iconic product linked to the company Steve Jobs founded, dropped to 4.078 million units, down 20 percent on the last quarter and 3 percent from a year ago.

Another bright spot, however, were services and “other products,” coming in with 31 percent and 38 percent year-on-year growth, respectively.

“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” Cook said said in a statement. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20 percent growth in Greater China and Japan.”

Patrick Moorhead, founder and head of Moor Insights & Strategy Inc., told SiliconANGLE that “as I predicted, Apple’s iPhone X was its best-selling phone in a time that other financial analysts were saying the phone was going to be killed.” Those analysts include Ming-Chi Kuo, who said in January that Apple was set to cease production of the model due to lackluster sales.

“Every product line improved, led by services (31 percent) and other (38 percent) but Macs were flat,” Moorhead noted. “iPhone X has staying power and stickiness, Watch and AirPods are very successful, and services are huge, a $12 billion run-rate business. The iPhone staying power gives the company time to get its HomePod business humming while the industry awaits AR and VR to kick in the next three to five years to provide growth.”

Investors liked what they saw, bidding shares up 3.7 percent in after-hours trading following a 2.3 percent rise in the regular session. No doubt investors also liked the news that Apple instituted a new $100 billion share buyback program and raised its dividend by 16 percent.

Photo: Pexels

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