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Apple Sells 48 Million iPhones, as Strong Growth in China Helps It Beat Wall Street Forecasts

Apple turned in another stellar quarter, driven by a 22% year-over-year jump in sales of its flagship iPhone line with particular strength in China, as it beat analyst expectations.

The company, which began shipping the new iPhone 6s and 6s Plus in late September, reported a record $51.5 billion in sales (up 22%) with net profit increasing 31%, to $11.1 billion ($1.96 per share) for its fiscal 2015 fourth quarter ended Sept. 26. Financial analysts had expected Apple to report $51.1 billion in sales and EPS of $1.88.

Apple’s international sales represented 62% of revenue in the quarter, and the company said sales in the China market nearly doubled — to $12.5 billion — with iPhone sales in the region up 87% year over year. Worldwide sales of 48.05 million iPhones for the quarter, up from 39.27 million in the year-earlier period, also set a Q4 record for the company.

“I would point out that we’re investing in China not for next or the quarter after, or the quarter after, we’re investing for the decades ahead,” CEO Tim Cook said on Apple’s earnings call Tuesday. “And as we look at it, our own view is that China will be Apple’s top market in the world.”

In China, more than 50% of iPhone 6 buyers are first-time iPhone purchasers; worldwide, 31% of iPhone users upgraded to the previous-generation iPhone 6 smartphones. “We believe China will remain a strong driver for Apple, but growth rates will decline to 30-40% YoY in 2016 due to a flattish smartphone market and slowing 4G smartphone growth, which remains the biggest challenge for Apple in 2016,” Rosenblatt Securities analyst Jun Zhang wrote in a note.

For the current quarter, Apple’s fiscal Q1 2016 that ends in late December, the company forecast revenue of between $75.5 billion and $77.5 billion; Wall Street analysts were expecting Apple sales to hit $77.1 billion in the period.

“We are heading into the holidays with our strongest product lineup yet, including iPhone 6s and iPhone 6s Plus, Apple Watch with an expanded lineup of cases and bands, the new iPad Pro and the all-new Apple TV which begins shipping this week,” Cook said in announcing the results.

Apple on Monday, Oct. 26, began taking orders for the new Apple TV models, which sport faster performance and Siri-enabled voice search. Cook didn’t reveal sales figures but said on the call that “it was a huge first day for this exciting new product. We want to provide the same innovation in the living room that we delivered in our iOS devices.”

Sales of iPads were down 20% in the most recent quarter, to 9.9 million units versus 12.3 million in the year-earlier period. The company does not break out sales of Apple TV, Apple Watch or Beats music accessories, which are lumped together in the “other products” segment; sales for that category rose 61% to $3.0 billion.

Apple also announced a cash dividend of 52 cents per share, payable on Nov. 12. The company paid $17 billion to investors during the most recent quarter through share repurchases and dividends, and CFO Luca Maestri noted that Apple has completed more than $143 billion of its $200 billion capital-return program.

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