But the quarterly forecast contained a sales view that didn’t wow investors. Shares dove 6% in after-hours trading, to $122.11 per share. Apple reported after the markets closed. Shares had been up 39% in the past year, nearing a record high.
Apple expects revenue of $49 billion to $51 billion in its current quarter, shy of the $51.1 billion expected by analysts polled by Thomson Financial.
"To a degree, there are unrealistic expectations from the outside," says Gartner analyst Van Baker. "It is increasingly difficult for Apple to surprise," which could lead to similar problems for the company in coming quarters, Baker says.
iPhone led the way, again, with shipments of 47.5 million units — though some analysts had projected 48 million to 50 million.
While there is little doubt about the strength of iPhone, the mystery remains over Apple Watch.
Again, Apple (AAPL) did not disclose shipments of Apple Watch, raising a red flag among some analysts that the device is not selling as well as Apple hoped. Analyst Toni Sacconaghi Jr., like others, estimates Apple shipped 3 million watches.
The quarter underscored dueling narratives: The astonishing strength of iPhone 6 and 6 Plus sales, and mounting doubt over the long-term sales credibility of Apple Watch. This has led some industry experts to ponder if Apple is becoming a one-trick pony for products.
When pressed about Apple Watch, Apple CEO Tim Cook insisted in a conference call that the company is "convinced the Watch will be one of the top gifts of the holiday season."
iPhone has loomed large over the Cupertino, Calif.-based company: about 70% of Apple’s sales come from the device, and that is likely to continue as iPhone users upgrade to the 6 and 6-Plus models. Apple management estimates about one in five iPhone users made the switch in the last quarter, presaging a similar conversion rate over the next quarter or two.
There also appears to be a healthy number of “switchers” from other platforms to iPhone, as well as vibrant sales in China and other growing markets.
The runaway success of the latest iPhones have come at the expense of other Apple products. And that was reflected in Tuesday`s results.
The larger-screen iPhone 6 and iPhone 6 Plus have cut into iPad sales while many consumers have shied away from Apple Watch since it largely duplicates the functions of the iPhone. Sales of iPads fell for a fourth straight quarter, down 18% to 10.9 million.
Demand for iPhone is so strong, Apple is mulling whether to add a third assembler and asking manufacturers to build 85 million to 90 million new iPhones by the end of the year, according to the Wall Street Journal.
The closely-watched Apple Watch is considered a long-term barometer of the company`s success, should consumer hunger for the iPhone eventually dissipate. But the wearables category has proved to be hard to crack, prompting some analysts to compare it to the tablet market and iPad: impressive initial sales, followed by a slow, steady decline.
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