Investors and analysts interpreted the accounting change as a sign that Apple's days of posting bumper hardware sales have come to an end. Analysts were looking for 48.4 million iPhone units in the quarter, and an average selling price of $729.
The company made its bets for connecting with consumer wants when it laid out its new line of iPhones at its Press event in September.
The flat sales of iPhones and yet the increased revenue shows that Apple is earning by increasing the price of the devices.
Both, the declining/stagnating sales and increasing ASP of iPhone, has been attracting enough criticism for Apple, especially at the time when the growth of the global smartphone market is largely driven by developing markets, likes of India. Its shift up in prices, with many iPhone models costing around $1,000+ seems to be paying off in some parts of the world. It's Services business is the other half of that strategy.
The trend is indicating a colossal problem Apple has to deal with, and the company has chose to opt more damaging strategy to deal with - hide it! But more importantly, for the first time they give margin information on Apple's services business, which reached $10 billion in its fiscal fourth quarter, up 17 percent. Apple has also been trying to diversify its revenues away from device sales by offering additional services to its customers. The division includes the App Store, subscriptions, Apple Music, Apple Care and Apple Pay.
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Analysts had expected earnings per share of $2.78 on revenue of $61.5 billion. Amazon.com Inc. and Netflix Inc. tumbled about 20 percent each last month as the sector was pummeled by rising interest rates, and concern over the economic outlook and tariffs.
The tech giant share's fell sharply on Friday as investors digested a slowing sales picture coupled with reduced financial transparency, after management said that from now on it would withhold the key sales measure from analysts. The nearly $10 billion revenue is another record figure for the category and is expected to increase more as Apple pours in more efforts in offerings such as digital content and payments. At market close on Thursday, Apple shares were up more than 25 per cent for the year - supported by purchases by Warren Buffett and a $100 billion share buyback program - while the Nasdaq Composite Index is almost flat for the year.
Mac unit sales surged 42 percent from previous quarter.
Apple CEO Tim Cook speaks during an event to announce new products Tuesday Oct. 30, 2018, in Brooklyn, New York.
"In fiscal year 2018, our revenue grew by $36.4 billion".