Apple announced record earnings in the fourth quarter with services revenue reaching an all-time high. The Cupertino-based iPhone maker also projected strong revenues for the first quarter of fiscal 2018, which will be the first full quarter since the launch of the iPhone 8 and iPhone 8 Plus and the general availability of the iPhone X.
During the fourth quarter ending September 30, Apple saw a revenue increase of 12 percent from a year ago to $52.6 billion. The company sold 46.6 million iPhones during the period, a sequential growth of 14 percent generating revenue of $28.8 billion. iPad sales came in at 10.3 million units and accounted for $4.8 billion in terms of revenue. Mac sales saw a boost to 5.3 million units and contributed $7.17 billion in revenue.
While Apple doesn't disclose sales of other products like Apple Watch, Apple TV and AirPods, it said the revenues from other products was $3.2 billion. Despite strong iPhone sales, the highlight of the quarter remains revenues from the service business, which set a new record at $8.5 billion. The services revenue for the same period last year was $6.3 billion. Apple's services business is now bigger than the combined revenues for iPads and other products sales.
"With fantastic new products including iPhone 8 and iPhone 8 Plus, Apple Watch Series 3, and Apple TV 4K joining our product lineup, we're looking forward to a great holiday season, and with the launch of iPhone X getting underway right now, we couldn’t be more excited as we begin to deliver our vision for the future with this stunning device," said Tim Cook, CEO, Apple Inc.
"Apple's year-over-year revenue growth rate accelerated for the fourth consecutive quarter and drove EPS growth of 24 percent in the September quarter," said Luca Maestri, Apple's CFO.
Apple says international sales accounted for 62 percent of the quarter's revenue and Cook stays upbeat about the company's prospects in India. In an earnings call, Cook said that almost all of the iPhone SE units sold in India were locally made. He added that India revenues doubled year-on-year for the quarter ending September, demonstrating consumption for iPhones in the country.
Apple demonstrated its seriousness towards the Indian market by making the iPhone X available in the country in its first launch wave. This is the first time an iPhone is going on sale in India at the same time as its availability in the US, Australia and Europe. Apple has partnered with Taiwan-based Wistron for the local assembly of the iPhone SE in India. The company is also negotiating with the government for establishing its own manufacturing base and starting its own retail stores.
Apple saw its sales plummet in China and most analysts believe the company should look at India for future growth. With China showing signs of recovery and India temporarily becoming the second largest smartphone market, the company would be hoping to get necessary clearance to continue its strong momentum. For market watchers, Apple estimates revenues between $84 billion and $87 billion for Q1 2018 and gross margins between 38 percent and 38.5 percent. With Apple beginning to ship iPhone X priced at $999 to consumers, one of the key indicators will be the average selling price of iPhone. There are also expectations that Apple would become the first company to hit trillion dollars in market cap when it announces results in February next year.