Apple CEO Cook Touts 'Significant Upswing' In iPhone Demand From Earlier In Year

While iPhone revenue was still down substantially year-over-year, sales of the iPhone portfolio improved in the Apple’s fiscal fourth quarter compared to previous quarters sequentially, Cook said Wednesday.

Apple may be starting to see a turnaround in its sagging iPhone business.

The debut of new iPhone models in September—especially the iPhone 11, which comes with a lower price than its predecessor model—helped to spur better-than-expected results in iPhone revenue during Apple's latest quarter.

[Related: The 5 Most Eye-Catching Updates On The iPhone 11 And 11 Pro]

The iPhone business generated revenue of $33.36 billion during Apple's fiscal fourth quarter of 2019, ended Sept. 28, the company disclosed on Wednesday.

That was down 9.2 percent from $36.76 billion in iPhone sales during the same period the year before. But Apple CEO Tim Cook nevertheless called the results a "significant improvement over the 15 percent decline we saw across the first three quarters" of the company's fiscal 2019. It was also above a consensus of Wall Street analyst forecasts of $32.77 billion in iPhone revenue for the fiscal Q4.

The results included a little over a week worth of sales of the three new iPhone models—the iPhone 11, 11 Pro and 11 Pro Max.

The iPhone 11—which features the same 6.1-inch LCD display as its predecessor iPhone XR, but a price cut of $50 and an improved camera—has particularly been driving strong performance in the market, Cook said Thursday.

The iPhone saw a "significant upswing in demand in the final part of the quarter," and the iPhone 11 has quickly become Apple's best-selling smartphone model, Cook said during the company’s quarterly call with analysts.

Cupertino, Calif.-based Apple was hamstrung by declining iPhone sales throughout its fiscal 2019, caused in part by a slowdown in upgrades and reduced demand from China.

Looking ahead, “we do expect an improvement in our year-over-year growth rate on iPhone,” Apple CFO Luca Maestri said during the quarterly call. Guidance for Apple’s first fiscal 2020 quarter is for between $85.5 billion and $89.5 billion in revenue, representing an increase from $84.31 billion during the company’s first fiscal 2019 quarter.

Apple also had a strong fourth fiscal quarter for iPad sales, even though the newest model—the seventh-gen iPad, featuring a larger display and ability to connect a keyboard—was not launched in time to be part of the quarterly results. Cook said that iPad Pro sales helped to generate year-over-year iPad revenue growth of 17 percent to $4.66 billion in Apple’s fiscal Q4.

In Mac, revenue dropped 4.8 percent to $6.99 billion during Apple's fiscal fourth quarter, which Cook blamed on a challenging year-over-year comparison (Q4 of fiscal 2018 had included recently updated MacBook Pro models). Reports have also circulated that Apple is planning to launch refreshed MacBook models in coming quarters.

However, for Apple's fiscal 2019 overall, Mac sales climbed slightly to $25.74 billion, which Cook said is an all-time record for annual Mac revenue.

During its fiscal fourth quarter, Apple also saw strong growth in its Services business (up 18 percent year-over-year to $12.51 billion) and in its Wearables, Home and Accessories business (up 54.5 percent to $6.52 billion).

Net income for the quarter was $13.69 billion, or earnings of $3.03 per diluted share, compared to net income of $14.13 billion, or earnings of $2.91 per diluted share, in the year-ago quarter.

Overall fiscal 2019 revenue for Apple slipped to $260.17 billion, down 2 percent from $265.6 billion in total revenue for the company's fiscal year 2018.