Apple expects positive quarter

Apple last night forecast sales for the crucial holiday shopping quarter that beat Wall Street expectations, with chief executive Tim Cook saying that new iPhone 11 models were off to “a very, very good start” as sales of AirPods, Apple Watches, and streaming services continue to rise.

Apple expects positive quarter

Apple last night forecast sales for the crucial holiday shopping quarter that beat Wall Street expectations, with chief executive Tim Cook saying that new iPhone 11 models were off to “a very, very good start” as sales of AirPods, Apple Watches, and streaming services continue to rise.

The outlook reaffirms Mr Cook’s strategy to remake a company that consistently depended on iPhone sales for well over half its revenue to one that depends on services and wearables.Since 2017, Mr Cook has had to implement the strategy while also shepherding Apple through a trade dispute between two of its most important markets, the United States and China. (Graphic: tmsnrt.rs/34qdgDV)

Apple said it expects $85.5bn billion to $89.5 billion (€77bn to €80bn) in sales for its fiscal first quarter that ends in December, with a midpoint of $87.5 billion that is above analyst expectations of $86.9 billion, according to IBES data from Refinitiv.

Apple shares rose about 2% to $247.50 in after-hours trading after the results.

The forecast comes as Apple said it generated $33.36bn billion in iPhone sales for its fiscal fourth quarter ended in September, which compares with analyst expectations of $32.42bnbillion, according to Refinitiv data.

The results mark the fourth straight quarter of year-over-year declining iPhone sales as the company.

tries to shift its business away from reliance on the flagship product and toward a broader product mix.

The above-expectations forecast for the holiday shopping quarter — traditionally Apple’s biggest sales quarter of the year — suggested that Apple’s price cuts on many iPhones were helping it regain momentum.

In September, the company unveiled a lineup that included the new iPhone 11 priced at $699, $50 lower than the debut price of its predecessor, the iPhone XR.

“The starting price of $699 is a factor in bringing more people into the market and giving people just another reason to upgrade,” Mr Cook told Reuters.“In China specifically ... we picked locally relevant price points that were more similar to the price points that had great success with earlier.”

Apple said its services and accessories segments generated $12.51bn billion and $6.52bn in fourth-quarter revenue, respectively, topping analyst estimates of $12.15bn and $6bn, according to Refinitiv data.

Apple now has 450 million subscribers to its own or third-party services on its devices, and sales of wearables were up 54% versus the previous year.

-Reuters

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