Apple on Thursday reported a decline in iPhone sales during the last three months of 2017, but came away smelling sweet — thanks to the high price tag of the iPhone X.
The just-popular-enough $999 flagship smartphone sparked a record quarterly revenue of $88.3 billion — and pushed the cost of an average iPhone to $796.
That’s 15 percent above the average price a year earlier.
Cheerful investors overlooked the fact that the 77.3 million iPhones sold in the quarter missed the 80.2 million units Wall Street expected — pushing shares of the tech titan up 3.4 percent in after-hours trading, to $173.45.
Apple said total revenue in the period ended Dec. 31 rose 13 percent, to $88.3 billion — beating expectations.
“We’re thrilled to report the biggest quarter in Apple’s history,” Chief Executive Tim Cook said. “iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November.”
Apple also narrowly beat earnings expectations, bringing in $3.89 a share, compared with the forecasted $3.86.
On the downside, Apple forecast revenue for the current quarter of $60 billion to $62 billion — slightly below estimates of $65.73 billion.
The better-than-expected profits and sales in the fiscal first quarter helped steady Apple shares after a tough few weeks when concern about iPhone X sales dented the company’s shares.
The iPhone X, which Cook has dubbed “the future of the smartphone,” has been easier for consumers to get their hands on than originally expected, leading to speculation that it wasn’t selling at Apple’s usual record pace.
Investors were also spooked by a report that Apple had informed suppliers that it is cutting production targets for its flagship smartphone in half.
Apple had originally planned to crank out 40 million iPhone X units during the first three months of 2018, but has slashed that number to 20 million.
A survey of people planning to buy the iPhone showed that the percentage of them looking to buy the iPhone X has dropped to 37 percent from 43 percent in an earlier survey, UBS analysts wrote in a note on Monday.
Nonetheless, on a call with investors, Cook declared that the iPhone X has set Apple up “for the next decade.”
The CEO also noted that the Apple Watch Series 3’s sales were “more than twice the volume” of the previous year’s model, and said that Apple Pay — the company’s digital wallet and mobile-payment system — is now accepted at more than half of US retailers.
Apple also moved 5.1 million Macs and 13.2 million iPads in the last quarter.
The company will be launching its newest hardware — the HomePod speaker — next Friday.
The smart speaker will sell for $349 and features built-in Siri functionality. It was originally supposed to hit stores in time for the holiday season, but was delayed for unspecified reasons.