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Apple in touching distance of $US1 trillion mark after profits jump

01 August 2018

Also significant is a continued growth in the company's non-hardware revenue: Apple generated $9.55 billion with services during its fiscal Q3, compared to $7.23 billion a year ago.

But it missed Wall Street's target on phone sales, selling 41.3 million units compared to forecasts of 41.8 million units.

Some of the more bullish Apple analysts believed Apple might report $9.2 billion in services revenue for the June quarter. All Cook would say is that Apple "couldn't be more excited by the products and services in our pipeline". At almost $10 billion (let's just round for convenience), Services is making up almost 20% of Apple's $53.3 billion in total revenue.

The maker of iPhones, iPads and other products posted revenue of $53.27 billion, up 17 percent, also exceeding Street forecasts for revenue of $52.37 billion.

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And Apple has used its pile of cash to buttress share prices, buying back $20 billion in stock in the quarter, part of a $100 billion stock buyback program. Interestingly, there were no specific statements about the Indian market, where Apple has not had a great quarter as per local analysts, except for the comment in the earnings call that it was one of the markets were the Mac had shown double digit growth.

Apple ended the trading day with a market cap of $935.3 billion.

The average selling price of each iPhone was $724, beating expectations of $699, and higher than last year's $606 ASP. Global sales accounted for 60 percent of the quarter's revenue.

Analysts were looking for 41.6 million iPhone units in the quarter, and an average selling price of US$699, according to estimates compiled by Bloomberg News. Some of the most optimistic analysts only predicted $2.26 per share. Apple said iPhone shipments edged about 1% higher. Maestri told Reuters that sales from Apple Care, the company's warranty offering, were up 27 percent versus a year ago, though the company did not disclose a dollar figure for sales.

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Let's start with the iPhone. Along with various online TV, news and publishing, gaming and cloud-hosting services, Apple is targeting $50bn in annual services revenues by 2020.

Apple shares have climbed 12 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed slightly more than 5 percent.

Analysts have learnt to look past Apple's third-quarter earnings to avoid any disappointment as consumers await the next iPhone upgrade, which is expected in September.

The total revenue from other products, which includes Apple Watch, AirPods and Beats headphones, came in at $3.7 billion, a 37 percent jump year-over-year.

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But one of the categories potentially affected by tariffs is the Apple Watch, which is one of Apple's growth drivers.

Apple in touching distance of $US1 trillion mark after profits jump