Apple Forecast Tops Estimates on High-End iPhones and Services

Apple projected sales that beat analysts’ estimates, suggesting consumers continue to snap up the company’s high-end iPhones, digital services and wearable devices, according to Bloomberg.

The technology giant expects fiscal fourth-quarter revenue between $60 billion and $62 billion. Fiscal third-quarter results also beat Wall Street expectations. Apple shares rose about 3.5 percent in extended trading, moving Apple closer to becoming the first U.S.-based company with a market value of $1 trillion.

More than a decade after its debut, the iPhone is still Apple’s most-important product, accounting for about 60 percent of revenue. While unit sales have slowed recently, the company is building digital services and a suite of other gadgets around the device. Those newer businesses, along with higher iPhone prices, have supported revenue growth.

Fiscal third-quarter sales rose 17 percent to $53.3 billion, while profit came in at $2.34 per share. The company sold 41.3 million iPhones in its third quarter, generating revenue of $29.9 billion. That was driven by a higher average selling price of $724. During a conference call with analysts, Apple CEO Tim Cook said the iPhone X was the most popular iPhone in the fiscal third quarter, gaining market share around the world.

Apple reported record services revenue of $9.55 billion, up 31 percent from a year earlier. The company’s Other Products segment continued to see strong growth, with revenue up 37 percent to $3.7 billion. Cook said wearables were a highlight of the quarter, with sales up 60 percent year over year. The Apple Watch had a record quarter with mid-40 percent growth.

Apple’s fiscal fourth-quarter outlook is closely watched because this is usually the period when the company unveils new iPhones. The company is expected to launch three new phones later this year. That’s raised Wall Street expectations for more sales and profit. Cook told analysts that Apple is on track to meet a goal of doubling Services revenue by 2020. Paid subscriptions have now passed 300 million, he also noted.