Apple Reports Record Revenue, Continuing Pandemic Streak

· Rival Samsung Down in the Dumps

Tech giant’s iPhone sales grew by about 10%, falling slightly short of investor expectations

· The dollar’s value has risen with respect to other currencies this year, a development that has weighed on the results of multinational corporations.

· Sales from services, which includes revenue from the App Store and Apple TV+, was $19.2 billion, up about 5% from the prior year but lower than year-over-year increases in previous quarters.

· Sales from the iPhone, which continue to account for around half the company’s total revenue, were $42.6 billion, advancing 9.7% from the previous year.

· The latest iPhone Pro models are estimated to account for 60% of overall iPhone 14 sales

· Strong demand for its iPhone 14 Pro models, supply is constrained.

· Mr. Maestri said the company is also dealing with supply constraints for the Apple Watch Ultra due to high demand.

· Since the introduction of a Pro model lineup in the 2019 iPhone 11 generation, iPhone buyers have been gradually conditioned into the higher end with Apple. Also with the arrival of 5G in late 2020, U.S. consumers have been willing to pay the premium.

· The average selling prices of the iPhone rose to $954 in the company’s June quarter, up from $783 in the 2019 September quarter.

· Sales from Greater China in the September quarter were $15.5 billion, up 6% from the previous year.

Apple Inc. AAPL 7.56% increase; green up pointing triangle reported record revenue in the September quarter, continuing a pandemic-fueled streak that investors have watched closely as demand for certain consumer goods has been sluggish.

The Cupertino, Calif., company announced its full-year earnings on Thursday after markets closed. To date, Apple’s business has largely proved resilient as broader smartphone-sales slowdowns and global economic challenges have dragged down peers.

“This is better than what we anticipated at the beginning of the quarter,” Apple Chief Financial Officer Luca Maestri said in an interview. Currency fluctuations had a negative impact on the company, he said. The dollar’s value has risen with respect to other currencies this year, a development that has weighed on the results of multinational corporations.

Growth slowed in Apple’s services business, an area some analysts say can point to slowing demand that may affect iPhone sales. Sales from services, which includes revenue from the App Store and Apple TV+, was $19.2 billion, up about 5% from the prior year but lower than year-over-year increases in previous quarters. Mr. Maestri said the services deceleration was due to effects of foreign exchange as well as slowdowns in digital advertising and gaming.

Apple said in a call with investors that year-over-year sales growth in the December quarter will be lower than the 8% revenue increase in the three-month period that ended in September.

Sales from the iPhone, which continue to account for around half the company’s total revenue, were $42.6 billion, advancing 9.7% from the previous year.

Overall sales were up 8% from the prior year at $90.1 billion, a record for the July-to-September period. Net income for the quarter was $20.7 billion, also a record. Total revenue, iPhone sales and net income surpassed analyst estimates.

Apple’s fellow tech giants are seeing significant slowdowns. Earlier this week, Microsoft Corp., Alphabet Inc.’s Google and Facebook parent Meta Platforms Inc. all reported disappointing earnings, citing factors such as softening consumer demand for PCs or weakness in digital advertising.

Profit slumped at Apple’s largest smartphone rival, Samsung Electronics Co., as its memory-chip business goes through an industrywide downturn from weakening demand for PCs and smartphones.

Last month, Apple announced its latest lineup of smartphones with the iPhone 14, which includes two lower-priced base models as well as two premium versions of the phone with the Pro designation. Analysts were expecting weakness in the base models as consumers lean toward the Pro models, which come equipped with a significantly better camera and chips.

The latest iPhone Pro models are estimated to account for 60% of overall iPhone 14 sales. Strong demand for its iPhone 14 Pro models, supply is constrained. Mr. Maestri said the company is also dealing with supply constraints for the Apple Watch Ultra due to high demand.

Strong Pro sales were expected to offset potential weakness in overall iPhone sales by boosting Apple’s average selling price for the iPhone. Since the introduction of a Pro model lineup in the 2019 iPhone 11 generation, iPhone buyers have been gradually conditioned into the higher end with Apple. Also with the arrival of 5G in late 2020, U.S. consumers have been willing to pay the premium.

The average selling prices of the iPhone rose to $954 in the company’s June quarter, up from $783 in the 2019 September quarter, according to Consumer Intelligence Research Partners.

Sales from Greater China in the September quarter were $15.5 billion, up 6% from the previous year, compared with the $15.1 billion analysts expected. Analysts were concerned about the strength of Apple’s business in China, as the country continues to undergo more Covid-related lockdown measures.