Apple, Inc yesterday moved to within $25 billion of becoming the first U.S. firm to hit a market value of $1 trillion. To hit the $1 trillion market value mark, Apple shares will have to rise about five percent more, and some analysts seem confident Apple can pull this off in the upcoming holiday season.
But then there's the detrimental effect of president Donald Trump's tariffs on Chinese imports. Analysts agree that the expanded list of imports (including electronic parts used in the iPhone that are made in China) will make the next iPhones more expensive. A significant drop-off in sales might follow.
The maker of the legendary iPhone saw its profit leap by more than 30 percent to $11.5 billion in the third quarter. The performance beat market expectations despite Apple admitting it sold fewer iPhones than analysts anticipated. Before this was the stunning news Huawei Technologies Co, Ltd became the world's second-largest maker of smartphones worldwide in April, knocking Apple down to third place.
Huáwéi is the largest telecommunications equipment manufacturer in the world, having overtaken
Despite these sad tidings, the cheery cash news boosted Apple's shares in after-hours trading and moved it even closer to the history-making $1 trillion market cap mark.
Apple reported revenue in the fiscal third quarter of $53.3 billion, a huge 17 percent increase from the same period in 2017. The massive jump was fueled by sales of pricier iPhones (especially the iPhone X; online services and wearable devices.
Apple's shares rose more than five percent to close at more than $201, closer to the $207 price needed to make it a $1 trillion company. The boost came after Apple reported strong demand for its most expensive iPhones, which improved its quarterly revenue despite a measly one percent growth in shipments. The average iPhone price stands at $724, which is well above the expected $694.
Apple said its $999 iPhone X launched in late 2017 was its most popular iPhone model in the third quarter and was responsible for the higher sales price. It reported a 31 percent revenue growth in its services business that also helped boost its revenue and profit growth. This business includes the App Store, Apple Music, and Apple Pay.
"We're thrilled to report Apple's best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth," said Chief Executive Officer Tim Cook in the earnings release.
Apple sold 41.3 million iPhones in the quarter ended June 30, a tad short of the 42 million figure anticipated by analysts. Its shares rose 4.03 percent to $197.95 in after-hours trade that followed the release of the earnings data.
"We couldn't be happier with how things are going given the momentum we are seeing across the board," said Cook.
"We feel great about our current services and are thrilled about our pipeline with some new services as well."