Apple pins Christmas hopes on wearables, trade deal
Apple CEO Tim Cook says the company's new AirPods Pro and iPhone 11 will give it strong Christmas revenue.
He forecast that sales for the year's biggest shopping quarter would be ahead of Wall Street expectations, led by strong sales of wearables and on the expectation of a US-China trade deal by the year's end.
Mr Cook wants to wean Apple off stagnating iPhone sales that make up more than half its revenue, and switch to generating income from services and wearables.
He is implementing the strategy while also shepherding Apple through a trade dispute between two of its most important markets, the United States and China.
Please log in or register with Independent.ie for free access to this article.
Apple said it expected $85.5bn (€77bn) to $89bn in sales for its fiscal first quarter that ends in December.
In an interview with Reuters, Mr Cook said he anticipated "a very, very good start" for sales of the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max released last month.
He said the forecast also reflected the company's belief that the United States and China will resolve their trade dispute.
"I don't know every chapter of the book, but I think that will eventually happen," Mr Cook said. "I certainly hope it happens during the quarter, but we'll see about that."
The forecast came as Apple reported $33.36bn in iPhone sales for its fiscal fourth quarter, ending in September.
The results mark the fourth straight quarter of year-over-year declining iPhone sales.
At the same time, hardware is getting less profitable on a gross margin basis, with Apple's net product sales falling, while the cost of sales rose slightly.
In September, Apple unveiled a line-up that included the new iPhone 11 priced at €829, lower than the debut price of its predecessor, the iPhone XR.
"The starting price is a factor in bringing more people into the market and giving people just another reason to upgrade," Mr Cook told Reuters.
He added: "In China specifically ... we picked locally relevant price points."