Apple breaks record for biggest ever company profit despite iPhone sales fall 

Apple has posted the biggest quarterly profit of all time despite a fall in iPhone sales.

The world's biggest company posted profits of $20.1bn (£14bn) in the crucial final three months of the year, breaking its own record set two years ago.

It came after the release of the £999 iPhone X in November, the biggest update of the handset to date, as well as the release of the iPhone 8 in September.

Although Apple sold 77m iPhones in the three month period, a 1pc fall from last year, the higher price of the new handsets meant revenues from selling iPhones increased.

iPhone X surpassed our expectations and has been our top selling iPhone every week since it shipped in November,” Cook said.

The company’s revenues grew 13pc to $88.3bn, also a record. The $20.1bn profits were up 12pc, from $17.9bn a year earlier.

Sales of the iPad increased marginally, while those of Apple's Mac computers fell. Sales of "other products" - a group that includes the Apple Watch and Apple TV - were up 36pc.

Shares initially fell in after-hours trading as Apple disappointed investors with its guidance for the next quarter, but rebounded soon after. The company said it expected revenues of between $60bn and $62bn, below expectations.

"We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup," Mr Cook said. He added that 1.3bn Apple devices are now in use, up from 1bn two years ago.

Cook said there had been a record year for the App Store, with augmented reality apps a particular area of growth. Sales of the new Apple Watch Series 3 were double those of the Series 2 last year.

Apple is the world's biggest company and is often tipped to be the first to break the one-trillion-dollar value mark, but shares have wavered in recent weeks amid fears that it may be cutting back iPhone X production.

The new handset, which boasts a bigger screen, no home button, and facial recognition technology, was well received by reviewers but costs up to £1,249 for its most expensive version. Apple said the decline in iPhone sales was largely due to the quarter being a week shorter than last year.

Apple is tipped to be the world's first trillion dollar company
Apple is tipped to be the world's first trillion dollar company Credit: Gene J. Puskar/AP

Three questions for Apple after results

By Margi Murphy

How much staying power does the iPhone X have?

The release of the £999 iPhone X in November saw Apple fans rush to buy the device, and Apple said it was the best-selling iPhone in every week it had gone on sale.

However, analysts have suggested demand for the flagship phone may have subsided, with some reports saying Apple has halved iPhone X production. 

Thursday night's results showed strong sales of the iPhone X, but once the hardcore fans have all bought one, how willing will average consumers be to shell out.

Will Apple’s new smart speaker compete with Amazon and Google?

While much focus is put upon iPhone sale results, there are also big questions surrounding Apple's other products and their profit potential. 

Apple’s much-anticipated HomePod will launch next week, with the company taking a big step into the market for smart speakers.

Apple's new HomePod
Apple's new HomePod Credit: AP

The £319 HomePod will take on Amazon’s Echo and Google Home, and costs significantly more than both.  But the HomePod is targeting customers who have stood by Apple for a decade: music lovers who are fussy about design.

Experts say Amazon and Google might trump Apple when it comes to artificial intelligence, but Apple is counting on high quality sound to win the speaker war. 

Will Apple be the first trillion dollar company?

Apple is the world’s biggest company and often tipped to be the first to be worth a trillion dollars. But it has taken something of a bruising in recent months. 

It recently admitted to slowing down older iPhones through a software update and is being quizzed by US authorities over the matter. Apple has reduced the price of battery replacements for iPhone owners, but customers may not be forgiving, and the incident may have an impact on future sales. On Thursday night Tim Cook said he didn't know how cheaper battery replacements would affect sales.

Its market value currently stands at around $860bn, meaning a 17pc increase in its share price would do the trick.

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