Apple reports sharp growth in its services business

Reuters
Cupertino, CA, USA Updated: Jan 30, 2019, 08:16 AM(IST)

File photo. Photograph:( Reuters )

Story highlights

Apple said sales for the current quarter would most likely be lower than Wall Street expected, a signal that it continues to face weak demand for its iPhone, especially in China, the world's biggest smartphone market 

Apple Inc reported sharp growth in its services business and Chief Executive Tim Cook said trade tensions between the United States and China were easing, helping the technology company's shares up after hours even as iPhone sales dipped in the holiday shopping quarter for the first time.

Apple said sales for the current quarter would most likely be lower than Wall Street expected, a signal that it continues to face weak demand for its iPhone, especially in China, the world's biggest smartphone market.

But investors focused on the company's growing services, which include Apple Music and its App Store.

"The services number is good, and that is the growth engine going forward that people will continue to focus on," said Ivan Feinseth, an analyst with Tigress Financial Partners.

Cook, who is in regular contact with U.S. President Donald Trump, said trade tensions with China, which may have depressed sales of its phones, were easing.

"If you were to graph up trade tension it's clearly less in January than it was in December," Cook told Reuters in an interview. "I'm optimistic that the two countries will be able to work things out."

The company's shares rose 6 percent to $163.50 in after-hours trading. They had fallen more than 30 percent since November on concerns about weak iPhone sales and a general decline in high-tech stocks.

"It appears that the bears pressed way too hard on the negative bets and even this more negative report couldn't drive the stock lower," said Hal Eddins, chief economist for Apple shareholder Capital Investment Counsel.

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