Apple squeezes more from each iPhone as holiday shipments flatten

Apple released itsĀ fiscal 2018 first-quarter results today. Amid concerns about soft iPhone demand over the holiday season, the company posted what it calls all-time record revenue of $88.3 billion, a 13% improvement year-on-year, and operating income of $26.3 billion, up 12.5% on the year. Net income continued the trend with a 12% increase to $20 billion. The company's 38.4% gross margin for the quarter shrank about one-tenth of a percentage point from a year ago.

Apple moved a whopping 77.3 million iPhones, down 1% from a year ago, but the company's most important product still brought in 13% more revenue than it did a year ago, at $61.6 billion compared to $54.4 billion. The introduction of the range-topping iPhone X doubtless helped to move average selling prices northward.

The company moved 13.2 million iPads, up 1% from a year ago, and the $5.9 billion those tablets raked in was up 6% from a year ago. Mac sales of 5.1 million units brought in $6.9 billion in revenue, but both Mac unit sales and revenues declined 5% from a year ago.

Apple's services revenue continues to grow at a vigorous clip. The company's various software and entertainment offerings brought in $8.5 billion, up 18% from a year ago. Other Products revenue, which includes the Apple Watch, grew an eyebrow-raising 36% on the year to $5.5 billion.

For the second quarter of Apple's fiscal 2018, the company expects revenue between $60 billion and $62 billion and gross margins between 38% and 38.5%.

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