Microwave Journal

Apple Reports Record Q4 on Flattish iPhone Volume

November 2, 2018

Apple, the bellwether of the mobile phone industry, reported record fourth quarter (Q4) revenue and earnings, reflecting some success as the company diversifies beyond the iPhone. Revenue for the quarter ending September 29 was $62.9 billion, 20 percent above the prior year’s quarter and 18 percent above the prior quarter (Q3 2018). Earnings per share (EPS) was $2.91, 41 percent year-over-year growth.

Apple quarterly revenue trend.
Apple quarterly revenue trend.

Luca Maestri, Apple CFO, said revenue growth was “double digit” in “each of our geographic segments and record Q4 revenue in the Americas, in Europe, Japan and the rest of Asia Pacific.”

Apple’s revenue guidance for the December quarter (historically Apple’s best quarter, reflecting the holiday shopping season in the west) is between $89 billion and $93 billion. The midpoint represents 3.1 percent year-over-year growth and a 45 percent sequential jump.

iPhone Performance

Apple sold almost 47 million iPhones in Q4, 14 percent above Q3’s volume, yet just 0.5 percent above the prior year’s fourth quarter. However, iPhone revenue grew 29 percent year-over-year to $37.1 billion, reflecting the increasing average selling price (ASP) of the iPhone, from $618 in Q4 2017 to $793 in Q4 2018. By increasing ASP, Apple is navigating the slowing demand for high-end smartphones.

Q4 included one week’s shipment of the new iPhone Xs and Xs Max, which were released on September 21. Last year, the iPhone 8 shipped on September 21, but the premium iPhone X wasn’t available until November 3.

iPhone quarterly shipments.
iPhone quarterly shipments.

Beginning with Q1 of 2019, Apple will no longer release unit sales data for iPhone, iPad and Mac.

“The number of units sold in any 90-day period is not necessarily representative of the underlying strength of our business,” said Maestri, arguing the breadth of the company’s portfolio, including services, makes the metric “less relevant for us today.”

That seems a tough sell for the financial analysts covering Apple.


Apple is having some success growing other products and services to reduce its dependence on the iPhone, which contributed 59 percent of the company’s revenue in Q4.

Q4 revenue contribution.
Q4 revenue contribution.

Maestri said Apple set quarterly revenue records for wearables, Mac computers and services and gained share in the U.S. tablet market, from 54 percent to 58 percent. The wearables segment includes Apple Watch, Airpods and Beats products.

Within the services segment, which reached $10 billion in quarterly revenue, Apple set revenue records for the App Store, Apple Music, Apple Pay, Apple Care and cloud services.

Asked about Apple’s interest in healthcare, CEO Tim Cook said, “I think Apple has a huge opportunity in health... I don’t want to talk about the future, because I don’t want to give away what we’re doing, but this is an area of major interest to us.”