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Apple posts record sales during holiday quarter

Apple Inc on Thursday reported record sales in the holiday quarter, beating estimates as it benefited from high iPhone demand in China and withstanding supply chain constraints and Omicron variant disruptions.

Chief Executive Tim Cook had warned in October that chip shortages were affecting the manufacturing of most Apple products and could lead to over $6 billion in lost sales

With few rival phones debuting in the holiday shopping season, the iPhone 13, which started shipping days before the quarter began, led to worldwide phone sales revenue for Apple of $71.6 billion, a 9 percent increase from the 2020 holiday season that handily beat Wall Street targets, according to Refinitiv data.




Apple’s smartphone market share in China reached a record 23 percent in the holiday quarter, when it was the top-selling vendor there for the first time in six years, research firm Counterpoint Research reported on Wednesday.

The company’s overall fiscal first-quarter revenue was $123.9 billion, 11 percent up from last year and higher than analysts’ average estimate of $118.7 billion. Profit was $34.6 billion, or $2.10 per share, compared with analysts’ expectations of $31 billion and $1.89 per share.

The coronavirus pandemic has accelerated the adoption of digital tools for communication, learning and entertainment, powering Apple to blowout sales across each of the company’s segments, including computers, accessories and tablets.



Apple’s services business, which covers paid apps such as Apple TV+, Apple Music and Apple Fitness+, also has seen a big bump. Services revenue rose 24 percent to $19.5 billion, topping analysts’ estimates of $18.6 billion. The company has 785 million paying subscribers across its offerings, an increase from 620 million a year ago and 745 million last quarter.

Sales for iPads fell 14 percent to $7.25 billion compared with analyst estimates of $8.2 billion, seeming to confirm industry predictions that iPads would have low priority for any scarce parts.

Sales for Macs rose 25 percent to $10.9 billion compared with estimates of $9.5 billion, and sales for accessories rose 13 percent to $14.7 billion compared with estimates of $14.6 billion.

For investors, the growing services business is helping mitigate production challenges. Apple is trading at 27 times expected earnings over the next 12 months. While down from as much as 35 a year ago, it remains above the company’s five-year average of 20 times expected earnings, according to Refinitiv.