Familiarity breeds comfort.
At least, that’s the case with the iPhone 7. Apple hardly changed the body of its flagship phone, yet consumers cozied up to the device like never before.
Apple sold more iPhones than ever before — 78.3 million — and snapped a three-quarter streak of iPhone unit sales declines. Analysts had expected the company to sell 78 million iPhones in the period, Apple’s biggest of the year. The results fueled its highest-quarter revenue and per-share earnings ever.
“We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch,” Apple CEO Tim Cook said in a press release. “Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline.”
Apple’s fortunes, as always, swing with the iPhone. The company generates about two-thirds of sales from the device. And a lot of revenue not directly from the iPhone, like services, is also tied to the phone. But Apple, like other handset makers, is facing waning excitement over phones, something that led its iPhone sales to drop for the first time ever in 2016.
While the iPhone 7 isn’t quite the blockbuster that the two-year-old iPhone 6 was, it still offered some features that drew in the Apple faithful. The iPhone 7 and the 7 Plus added features like better cameras and water resistance, all in that familiar body.
Analysts hope the upcoming “iPhone 8,” the 10th anniversary device, will propel Apple to its best year.
iPhone sales might have been strong, but iPad demand continued to falter. Apple sold 13.1 million iPads during the quarter, down from 16.1 million a year ago. Analysts expected Apple to sell 14.8 million iPads. This is the 12th straight quarter of lower iPad sales despite Apple’s efforts to revitalize the market with its Pro models. The pricier iPad Pros work with optional styluses and keyboard cases.
Consumers bought 5.4 million Macs in the three months ended in December, compared with analysts’ projections for 5.2 million. A year ago, Apple sold 5.3 million Macs. Apple in October made the first major changes to its MacBook Pro line in four years, adding a Touch Bar and other features to modernize the computers.
Revenue from Apple’s services businesses, like iTunes and AppleCare, continued to jump in the quarter, up 18 percent to $7.2 billion.
Apple’s net income slid to $17.9 billion from $18.4 billion. Per-share earnings, though, rose to $3.36 from $3.28. a year ago. Analysts polled by Yahoo Finance expected Apple to report earnings of $3.22 a share. Apple had fewer shares in the market, which boosted the per-share earnings.
Overall revenue climbed 3.3 percent to $78.4 billion. Wall Street anticipated revenue of $77.4 billion. (In October, Apple projected sales of $76 billion to $78 billion, above analysts’ estimates at the time.)
Apple expects revenue between $51.5 billion and $53.5 billion for the current quarter.
Before Tuesday, analysts had projected second-quarter of $54 billion, up 6.9 percent from a year ago.
Apple shares rose 2.6 percent to $124.50 in after-hours trading.
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