Apple’s more expensive iPhones are making them a lot more money

We spent time with Apple’s new hardware not long ago, but the company is keeping the party going with another new release: its Q4 2018 earnings. Right off the bat, we’re looking at total revenues of $62.9 billion — that’s up from the $52.6 billion the company reported last year, and comfortably above the consensus estimate of $61.57 billion thrown around by Wall Street analysts. To hear Apple CEO Tim Cook tell it, this has been the company’s strongest September quarter ever. And as usual, Apple was also quick to point out its sales strengths overseas, noting that a full 61 percent of its overall revenue came from international markets.

So, yes, this is another big quarter on the books for Apple, and iPhones again accounted for the lion’s share of the company’s total intake. That’s not because it’s selling more of them than usual, though.

Wall Street types expected to see iPhone growth in the single digits, but in fact, the change in iPhone sales between this quarter and Q4 2017 was basically negligible — Apple reported a whopping zero percent growth. Keep in mind that this fiscal quarter only includes the first week the new iPhone XS and XS Max were on sale. The less expensive XR, meanwhile, isn’t included in this release at all since it launched later.

With that in mind, it’s really no surprise Apple hasn’t sold dramatically more iPhones than usual. And while we’re on the subject of things that aren’t surprises, how about this: despite flat iPhone growth, Apple continues to make more money off of the same number of devices. iPhone revenue was up 29 percent despite only selling about 200,000 more iPhones than usual. For those keeping track, that means the average selling price (or ASP) of an iPhone is now $793 — that’s a huge jump over the $618 average Apple reported last year. It’s not hard to look at this bonkers number as further proof that people are willing to shell out for devices like the iPhone X, but hey, Apple has been saying the X has been its best-selling phone for a few quarters now.


As usual, the really exciting numbers will be released next quarter, after the holidays subside and we’re left taking stock of everything that happened. Are people flocking to embrace Apple’s premium phones? Or will the XR’s more mainstream appeal win out? Apple doesn’t ever break down iPhone sales by model, but we’ll be able to make some educated guesses based on the iPhone’s average selling price in three months.

Meanwhile, Apple sold fewer iPads in this quarter compared to this time last year: think 9.69 million, down from 10.3 million. That doesn’t sound great (because it isn’t, really), but this number doesn’t really mean much given the context of the past few days. Wit