Apple shook off production problems with its latest iPhone on Thursday to report a 19% rise in profits and record pre-sales of iPhone X, the day before its release. The company’s share price hit a record high on the news, moving the company, now worth over $868bn, closer to becoming the world’s first trillion-dollar company.
The tech company sold 46.7m of its flagship iPhones in the last three months, beating analysts’ expectations and generating revenues of $28.5m – more than half the $52.6bn it earned over the quarter, which included the launch of the iPhone 8 at the end of September.
Services, the App Store, iTunes, Apple Pay and iCloud – are now Apple’s fastest-growing business. They generated an all-time high of $8.5bn in the quarter and made $27.8bn in the 12 months ending 1 July. Sales in China were up 12%, reversing a drop off in the company’s second largest market.
Sales of its Mac computers rose 25% to $7.17bn, the best year ever for the product line, driven largely by sales of the Macbook Pro. Sales of iPads continued to bounce back after a slump, with revenue up 14%. Apple does not break out unit sales for Apple Watch but Cook said growth was over 50%.
The company is now sitting on a cash pile of $268.9bn, almost all of it held overseas in lower tax rate jurisdictions. The news comes as Donald Trump moved to bring back cash held overseas with a new tax plan outlined on Thursday.
Apple’s upbeat results suggest the company is on track to deliver the biggest profit ever recorded by a US company in the next quarter, which included the all-important holiday shopping season and the release of its latest iPhone.
Tim Cook, Apple’s chief executive officer, said: “I have to say I couldn’t be more excited by Apple’s future. This was our biggest year ever in most parts of the world,” he said. He said he expects the current quarter to be the company’s biggest ever, after a “sensational year” for 2017.
“The ramp for iPhone X is going well,” said Cook. “We are really happy that we are able to increase week by week what we are outputting and we are going to be getting as many as we can to people as soon as possible.”
Production problems have marred the release of iPhone X but the company is still forecasting revenues of between $84bn and $87bn for the next quarter compared with $78.4bn for the same period last year. Cook said orders of iPhone X “have already been very strong”.
The iPhone X (pronounced 10) is Apple’s most expensive iPhone yet, costing $999 to $1,149 in the US and £999 to £1,149 in the UK. But despite the price, and mixed reviews, the device sold out within minutes of its launch.
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