(Reuters) – Apple Inc’s quarterly profit and revenue beat Wall Street’s targets on Tuesday, and the forecast for fourth-quarter revenue topped expectations, with Chief Executive Tim Cook has told Reuters that “the marked improvement in the “greater China” is driving the results.
FILE PHOTO: The Apple logo will appear on the stage, before a product unveiling event at Apple headquarters in Cupertino, california October 4, 2011. REUTERS/Robert Galbraith/File Photo
Services revenue in the fiscal third quarter increased 12.6% to $11.46 billion, a new all-time high, but missed the expectation of $11.73 billion, according to IBES data, Refinitiv. Apple’s CEO, Tim Cook, told Reuters that, after factoring out a one-time payment of litigation, a year ago, and the exchange rate, in the services segment, growth would have been 18%.
China sales decreased by 4% to us $9.16 billion, following a decline of 22% in the second quarter of the year. The Chinese smartphone market, shipments decreased by 6% in Apple’s fiscal third-quarter, according to market research firm Canalys.
The trade tension between the United States and China, have weighed heavily on Apple, because of the delay of the economic growth in China, a crucial market for Apple. Apple will effectively cut the iPhone prices in China earlier this year after the currency exchange, rates could have been made of her phone is too expensive for many Chinese consumers.
The Cook told Reuters that the results of the mainland of China, which is a subset of the company’s greater China region, has been positive.
“We actually grew up in the mainland of China,” Cook told Reuters. “The non-iPhone revenue increased by 17%. We are growing in every category, the exterior of the iPhone.”
Apple said that it expects revenue for the current fiscal fourth quarter to between $61 billion and $64 billion, which compares to the analyst estimate of $61.02 billion.
For the fiscal third quarter, which ended in June, Apple reported a 1% rise in revenue to $53.8 billion and a 7% decline in earnings per share to $2.18, compared with expectations of $ 53.39 million and $2.10 per share, in accordance with Refinitiv of the data. The IPhone’s sales have decreased by 12% to $25.99 billion, roughly in line with expectations, to $25.96 billion, according to the Refinitiv of the data.
“In regards to the iPhone, the most important thing for us is that we can continue to grow the installed base,” Cook told Reuters. “And we did it on the iPhone. And the fact that people have been hanging on to for a little bit longer, it’s not something I’m worried about the 90-day clock.”
Apple did not give the number of the currently installed base of Apple machines, but said that it was growing.
THE TRADE TENSION STILL LOOMS LARGE
Apple reported results for the U.S. and Chinese trade negotiators met in Shanghai for the first time, for the person of the word, since it is a G 20 cease-fire last month after an AMERICAN President, when He said that he would not impose new fees on the final $300 billion in Chinese imports if China agreed to the purchase of U.S. agricultural products.
Apple’s most important products, such as ipad, iPhone are made in China, but so far have avoided the charges. However, the iPhone would have to be included in the remaining $300 billion in a round, as it is written.
“I don’t know what the journey will be, but with the passage of time, I am optimistic that we will all come to a good end, and everyone will win in the” Cook told Reuters when asked about the trade.
Apple’s market share in China has fallen to 5.8% from 6.4%, according to market research firm Canalys, in part because of the smartphone’s arch-rival Huawei Technologies Co Ltd [HWT.UL] in market share, at the top of the handset vendor in the country.
But Apple’s experience in a smaller and smaller share of the market to eliminate other competitors, such as Xiaomi Corp, Oppo and Vivo, according to the Canalys data. Cook said that the iPhone price changes, and the Chinese government’s move to cut the telephone tax so that the iPhone’s sales in China, has served to erode further.
“Our trade-in and financing programs are doing extremely well in China,” Cook told Reuters. “Because of the active installed base is growing in China, and our services, we are doing very well, growing at double-digit rates.”
Apple shares have gained more than 20% since the beginning of June, when the shares fell on the news that the U.S. Department of Justice had the competence to decide on the company as a potential probe as part of a wider review of the question of whether the technology giants to engage in anti-competitive practices.
The Department of Justice formally announced last week, but it is not the name of a company that would have to be carefully examined. Officials said that the efforts have been focused on search, social media, retail, and services-on-line”, a clear reference to the Alphabet, Inc., Amazon.com Inc. and Facebook Inc. before then, Apple in particular.
But Apple has been facing complaints from the competitors and the music, and the practice of keeping 15% to 30% of the revenue earned by the developers on the App Store. In March, Spotify Technologies SA, has been Apple’s chief rival in the streaming music space, it was an anti-trust complaint against Apple with the officials of the European Union.
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Apple services, including Apple, Music, App Store and iCloud can be seen as a source of growth for Apple, iPhone sales have slowed down. In the coming months, Apple plans to hold a credit card, and subscription services for games and television.
Apple said that sales of its “Wearables, and home accessories segment includes devices such as the Apple Watch, and the AirPods was $ 5.53 billion, compared with the analyst estimate of $4.81 billion.
Apple said it returned more than $21 billion to shareholders over the course of the third quarter, including $17 billion worth of shares are bought back. It declared a dividend of 77 cents per share.
Report by Stephen Nellis in San Francisco; Editing by Peter Henderson and Lisa Shumaker