Apple didn’t quite hit estimates for iPhone units in the fourth financial quarter of 2018, but despite that, it made more money than expected. How? Well, largely by raising the average selling price of the iPhone through the more-expensive-than-ever iPhone XS and iPhone XS Max.
Apple is having a pretty good quarter. The company has announced its fourth-quarter 2018 earnings, showing earnings that beat Wall Street estimates, thanks largely to the heightened average selling price of the iPhone.
While Apple sold about as many iPhones as it did in the fourth quarter of 2017, the iPhones it did sell were more expensive, basically meaning that the company made far more than it did with the same number of units last year. The average selling price of the iPhone came in at $793 — up 28 percent compared to 2017’s fourth quarter. The company sold 46.89 million iPhone units in the fourth quarter of the 2018 fiscal year, which didn’t quite hit the 47.5 million units expected.
Interestingly, Apple also announced that it would stop providing data related to the number of units it sold. That’s to say, it will no longer announce how many iPhones it has sold, though it will say how much it made from iPhones. It’s possible Apple has chosen to stop reporting on unit sales due to slowing sales in some market segments, though Apple argued that the decision was because earnings were more important than unit sales anyway.
The iPhone isn’t the only contributor to such high Apple earnings results. Alongside the new iPhone series, Apple also took the wraps off of the new Apple Watch Series 4, which has received excellent reviews since its release. Apple’s gadgets category, which includes AirPods and the Apple Watch, reached $4.23 billion in revenue, which is an increase of 31 percent over last year.
Services is another segment that Apple is doing well in. Services include things like Apple Pay, Apple Music, iCloud, and the App Store, and reached $9.98 billion, which is also up from last year, by 17 percent. Still, that’s not quite as high as what Wall Street estimated at $10.2 billion. Overall, Apple’s revenue hit $62.9 billion, more than the $61.57 billion forecast.
Despite excellent financial results, there is some cause for concern. The rising prices of Apple devices really just offset slowing sales — so while Apple may have made more money than previous years in many segments, it did not sell quite as many devices. Because of that, by the time of this writing Apple shares had fallen 4 percent.
It’s likely Apple’s first quarter of the 2019 fiscal year will be pretty stellar, too. The company recently took the wraps off of a new MacBook Air and Mac Mini, both of which were long overdue updates, and will likely perform well in the holiday season as the new iPhone and Apple Watch will likely do, too. Apple is expected to make between $89 and $93 billion during the holiday season, which is up from the $88.3 billion revenue for the first quarter of 2018.
