Apple defies Wall Street with strong revival in iPhone sales

Apple's first fiscal quarter gains were tempered by a cautious outlook for the current quarter, which it mainly attributed to the strong US dollar. A strong dollar forces firms to raise prices in overseas markets.
Apple's first fiscal quarter gains were tempered by a cautious outlook for the current quarter, which it mainly attributed to the strong US dollar. A strong dollar forces firms to raise prices in overseas markets.PHOTO: AGENCE FRANCE-PRESSE

iPhone 7 sales numbers and profit of almost $25 billion send its shares up 3 per cent

SAN FRANCISCO • Apple reclaimed the throne as the world's top smartphone seller for the first time in five years on Tuesday, beating out rival Samsung in units shipped for the holiday quarter and boosting revenues with a strong showing for its new, top-of-the-line iPhone 7 Plus.

The iPhone sales numbers and a profit of almost US$18 billion (S$25.4 billion) both handily beat Wall Street expectations, sending its shares up 3 per cent in after-hours trading.

But the gains were tempered by Apple's cautious outlook for the current quarter, which it mainly attributed to the strong US dollar. A strong dollar hurts companies like Apple that sell a majority of their products overseas by forcing them to raise prices, which depresses unit sales, or sacrifice margins.

Apple sold 78.29 million iPhones in the fiscal first quarter ended Dec 31 last year, up from 74.78 million the year before. Analysts, on average, had expected 77.42 million, according to research firm FactSet StreetAccount.

That beat Samsung Electronics' 77.5 million smartphone sales in the quarter, according to tech data firm Strategy Analytics, the first time that has happened since the fourth quarter of 2011.

The results, which reflected the first full quarter of iPhone 7 sales, come at a time when global demand for smartphones is slowing and cheaper Android alternatives are flooding the market. Apple may also have benefited from Samsung's much-publicised recall of its fire-prone Galaxy Note7.

  • FIGURES FOR QUARTER ENDED DEC 31

  • 78.29m

    Number of iPhones sold.

  • $18b

    Net profit in US dollars.

  • $7.17b

    Services revenue in US dollars.

Apple is heavily dependent on the success of iPhones, which account for more than two-thirds of its total revenue. Analysts and investors have already set their sights on Apple's 10th anniversary iPhone, which is expected to feature better touchscreen technology, wireless charging and a shift to a higher-resolution organic light- emitting diode display.

Apple chief executive Tim Cook said demand was especially high for the larger iPhone 7 Plus in the fiscal first quarter.

Revenue in the services business - which includes the App Store, Apple Pay and iCloud - jumped 18.4 per cent to US$7.17 billion, helped by the popularity of games, including Pokemon Go and Super Mario Run, and increased revenue from subscriptions.

Apple is still looking for major new sources of growth as Apple TV struggles to set itself apart from competitors and its plans to enter the autonomous driving market take shape.

The company said Apple Watch sales set a record last quarter, but provided no numbers.

REUTERS

A version of this article appeared in the print edition of The Straits Times on February 02, 2017, with the headline 'Apple defies Wall Street with strong revival in iPhone sales'. Print Edition | Subscribe