Apple beats expectations as demand for 5G iPhone surges

Photo: AP Tim Cook

The high-tech giant Apple reported an upbeat holiday quarter sales and profits, Reuters reported. The robust growth is large attributed to high demand for the new 5G iPhones which has helped push handset revenue to a new record and sparked a 57% rise in China sales.

Apple shipped its iPhone 12 several weeks later than usual, but an expanded number of models and new look tapped pent up demand for upgrades, especially in China. The company also posted strong sales of its Mac laptops and iPads in the quarter, driven by consumers working, learning and playing from home during the pandemic.

Apple's revenue for the quarter ended 26 December rose by 21% to $111.44 billion. Sales of iPhones were $65.60 billion and beat a record set three years ago.

Chief Financial Officer Luca Maestri told investors that revenue growth was likely to accelerate on a year-over-year basis in the current fiscal second quarter and that gross margins were likely to be similar to the fiscal first quarter’s rate of 39.7%. He also said the company’s services segment revenue faced a tough comparison to the year before, when the pandemic lifted sales, and that year-over-year growth in the company’s wearables segment would slow.

Apple, the biggest U.S. listed public company by market capitalization with a value of $2.4 trillion, has thrived through a pandemic that forced it to shutter many of its stores but prompted many consumers to buy or upgrade devices.

Apple Chief Executive Officer Tim Cook told Reuters in an interview that the company now has an active installed base of 1.65 billion devices, compared with 1.5 billion devices a year ago. Cook also said Apple now has an installed base of more than 1 billion iPhones, an increase over the 900 million the company most recently disclosed in 2019. China proved a strong market for iPhone, with overall sales there rising 57% to $21.31 billion.

“We had two of the top three selling smartphones in urban China,” Cook told Reuters in an interview, adding that “upgraders in particular set an all-time record in China.” Mac sales hit expectations at $8.68 billion. Sales of iPads, services and wearable topped Wall Street targets. IPad revenue was $8.44 billion and the services business, which includes its new Apple One bundle of television, music and cloud storage services, had $15.76 billion in revenue.

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