Pricey iPhone models drive Apple profit higher

Tech giant Apple Inc. may not have sold as many iPhones during the quarter ending September 30, but the company’s pricier models are driving its profits higher than ever.

The California-based company reported it sold about 46,889 iPhones during the quarter, almost the same number of iPhones sold in the previous corresponding period.

Apple was selling its iPhone ASP at $793 during the quarter compared to the $618 price of the unit in the corresponding quarter a year ago. The company has also introduced the iPhone XS in September at a price starting $999 and the iPhone XS Max which costs about $100 more than the XS model.

The tech company has posted a 20 per cent increase in its quarterly revenue for the quarter to $62.9 billion, and quarterly earnings per diluted share of $2.91, up 41 per cent.

International sales accounted for 61 per cent of the quarter’s revenue.

Apple’s services revenue has seen a 27-per cent increase of $10 billion.

“We’re thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our two billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple history,” said Tim Cook, Apple’s CEO.

Cook said with their recently introduced new versions of iPhone, Apple Watch, iPad and Mac, and the company’s four operating systems, they have entered the holiday season with their “strongest lineup of products and services ever.”

“We concluded a record year with our best September quarter ever, growing double digits in every geographic segment. We set September quarter revenue records for iPhone and Wearables and all-time quarterly records for Services and Mac,” said Luca Maestri, Apple’s CFO. “We generated $19.5 billion in operating cash flow and returned over $23 billion to shareholders in dividends and share repurchases in the September quarter, bringing total capital returned in fiscal 2018 to almost $90 billion.”

Apple is looking at a revenue of between $89 billion and $93 billion for the first quarter of the 2019 fiscal year, a gross margin of 38 per cent and 38.5 per cent, and operating expenses between $8.7 billion and $8.8 billion.

Apple’s board of directors has declared a cash dividend of $0.73 per share of the Company’s common stock. The dividend is payable on November 15.

Neil Saunders, managing director of GlobalData Retail, said the quarter’s results underlines all of the innovation the company has put into its suite of products over the past year.

Admittedly, the new iPhone XS and XS Max versions, along with Apple Watch Series 4, were only available at the very end of this quarter, but we still believe they had a positive material impact on sales,” Saunders said.

Saunders said with the tech giant’s strong release of products, the potential launch of new services, and more sessions being added to better stores, Apple has set itself up for another year of growth.

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