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iPhone sales return to growth over key Christmas quarter

Apple has reported a rise in iPhone sales for the first time in a year as it delivered better than expected results for the key Christmas quarter.

The company also saw soaring demand for add-ons such as AirPods wireless headphones as revenues for the three months to the end of December rose 9% compared with the same period a year ago to $91.8bn (£70.5bn).

Profits were up 11% to $22.2bn (£17.1bn).

Shares climbed 2% in after-hours trading, also helped by Apple’s forecast for the current quarter which was higher than the numbers expected by Wall Street.

However, chief executive Tim Cook admitted that these were in a wider range than usual due to the uncertainty created by the coronavirus in China, where many of its suppliers are based.


He told US channel CNBC that Apple had shut one store in China and was restricting employee travel due to the virus, while other stores that remain open have reduced their opening hours.

There was a slight disappointment as the California tech giant’s services division – which includes the new Apple TV+ streaming service – missed revenue forecasts though it still reached a record high.

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Mr Cook said the overall result was “fuelled by strong demand for our iPhone 11 and iPhone 11 Pro models”.

Sales of iPhones were up 8% on the Christmas quarter last year at $56bn (£43bn), ending a year-long trend of major declines and easily beating analysts’ forecasts.

Wearable products – which include Airpods as well as the Apple Watch – saw revenues grow by 37% to $10bn (£7.7bn).

Meanwhile the number of active iPhones, computers and other devices owned by customers, called the “installed base”, grew by 100 million to more than 1.5 billion over the past year.

That growth helps it add services subscribers – seen as delivering more consistent revenues than erratic sales of the company’s hardware.

Apple set a new target of 600 million paid subscribers for music, TV, gaming and other services by the end of 2020, up from the previous target of 500 million which it now expects to surpass during the current quarter to the end of March.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “iPhone sales have comfortably beaten market expectations in the first quarter, suggesting the latest models have been a force to be reckoned with.

“Since iPhones make up over half of all sales that’s good going, particularly with the advances between different phone models becoming more nuanced and harder to differentiate, leading to a much more crowded marketplace.”


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