Apple expects iPhone, services, to lead strong holiday sales

Apple appears to be gearing up for a strong upcoming holiday season, as the Silicon Valley tech giant on Wednesday forecast quarterly revenue that could reach almost $90 billion and also reported strong sales of iPhones and from its services business.

Apple said that for the fiscal first quarter, which ends in December, it expects sales of between $85.5 billion and $89.5 billion. That outlook is being fueled by enthusiasm for the new iPhone 11 line of smartphones, which went on sale in September, as well as anticipation over the company’s Apple TV+ subscription TV service, which will cost $4.99 a month when it goes live on Friday.

“We’re very optimistic about what the holiday quarter has in store,” said Apple Chief Executive Tim Cook, in a statement covering Apple’s outlook, and the results of its fiscal fourth quarter, which ended in September.

Apple said that during the just-completed quarter, sales from services reached an all-time high of $12.5 billion. For Apple, services revenue include App Store sales, iCloud storage plans, Apple Music subscriptions and its cut from Apple Pay transactions. Such sales could also get a boost from new subscribers to Apple TV+, but Apple is also giving away a free year of Apple TV+ to anyone who buys a new iPhone, iPad or other Apple hardware products.

The iPhone continued to be Apple’s main source of revenue, with fourth-quarter sales of $33.7 billion. Apple didn’t say how much the iPhone 11 phones, which start at $699, contributed to the total iPhone revenue during the roughly two weeks of the quarter that the new iPhones were available to order.

For the quarter, Apple also said it earned $3.03 a share, on $64 billion in revenue, compared to analysts’ expectations of a profit of $2.83 a share, on sales of $63 billion.