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Apple credits iPhone 11 demand for record sales

Apple has credited a surge in demand for its iPhone 11 for record sales and profits over the Christmas period.

Apple boss Tim Cook also said it had been “closely monitoring” the coronavirus outbreak, which has made forecasting for subsequent quarter difficult.

The company has limited travel and reduced store hours in China, while its suppliers’ factories remain closed longer than expected.

“The situation is emerging and we’re still gathering data,” Mr Cook said.

Apple said sales within the last three months of 2019 rose 8% year-on-year to $91.8bn (£70.5bn), while net profits increased 11% to succeed in $22.2bn.

The gains were driven by demand for iPhones and accessories like watches and AirPods and marked a change from recent performance, which had disappointed with weak iPhone sales.

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In the most up-to-date quarter, iPhone sales climbed almost 8%, while sales of wearables like watches and AirPods jumped 44%, with demand so strong it created shortages.

Overall, Apple said it made about $79bn from products and $12.7bn from services, which incorporates Apple Pay, new streaming service Apple TV+, game service Apple Arcade and therefore the App store.

The almost 17% growth in services disappointed some analysts, who also noted the firm had offered little insight into the response to Apple TV+.

Still, the general results beat Wall Street expectations, sending shares up almost 3% in after-hours trade.

“While [streaming] is an intriguing area to stay an eye fixed on, it might be an error to lose specialise in the most business, and Apple remains considerably a hardware business,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Growth was strongest in Europe, where sales were up 14%. They increased 11% within the Americas and Japan, and three within the firm’s greater China region, which incorporates Taiwan and Hong Kong .

Apple’s iPhones made inroads within the Chinese market at the top of 2019, amid a broader 7% decline within the number of smartphones sold last year, consistent with research firm Canalys.

“There remains a robust pull factor for Apple’s products, at the proper price, given the hardware and repair ecosystem strength,” said Nicole Peng, Canalys’ vice chairman for mobility.

The firm said it expected sales of between $63bn and $67bn within the first three months of 2020. The range was wider than usual thanks to the coronavirus outbreak, Mr Cook said.

While Apple has “some” suppliers in Wuhan, Mr Cook said the firm has alternate sources in those cases. The impact on suppliers outside of Wuhan is “less clear”, with re-opening from the Chinese New Year currently delayed until 10 February, he said.

World’s top 8 mobile phone companies

  1. Samsung.
  2. Nokia. .
  3. Apple.
  4. LG.
  5. ZTE.
  6. Huawei.
  7. TCL.
  8. Lenovo.

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Apple credits iPhone 11 demand for record sales

Apple has credited a surge in demand for its iPhone 11 for record sales and profits over the Christmas period.