Apple Just Silenced the iPhone X Doomsayers

Call off the funeral arrangements: Turns out Apple is in fine health after all.

After weeks of rumors that the iPhone X is a dismal failure bringing down the entire lineup, Apple is showing receipts to the contrary. The company raked in $61.1 billion in revenue in the January-March quarter, up 16 percent year-over-year. Apple sold 52.2 million iPhones alone to the tune of $38 billion, bringing iPhone revenue up 14 percent from the same quarter last year. (Sales were up 2.9 percent.)

Apple CEO Tim Cook said the company sells more iPhone X units every week than any other iPhone it makes, and that’s been the case since the $999 device launched in November.

“This is the first cycle that we’ve ever had where the top-of-the-line iPhone model has also been the most popular,” Cook said during a conference call with analysts on May 1. “The iPhone X is a beloved product. Like a team wins the Super Bowl, maybe you’d want them to win by a few more points, but it’s a Super Bowl winner. That’s how I feel about [the iPhone X].”

"The strength of the iPhone X the quarter after its launch suggests that this is not only an early adopter product.” - Avi Greengart, GlobalData analyst

Supply chain analysts have pointed to disappointing earnings and revenue forecasts from some of Apple’s suppliers overseas, which indicate that the company isn’t buying as many components for the iPhone X. But Apple’s earnings show that demand for the iPhone X remains strong, said GlobalData analyst Avi Greengart.

“As we get closer to the next launch cycle, iPhone X sales should drop quarter over quarter,” Greengart said. “However, the strength of the iPhone X the quarter after its launch suggests that this is not only an early adopter product.”

It may seem like Apple can’t possibly sustain iPhone sales for years to come, but in the company’s earnings call, Cook pointed out the fact that 500 million feature phones were sold in 2017, largely in emerging markets. Those buyers will eventually upgrade to smartphones. Apple hopes those smartphones will be iPhones.

MORE: iPhone X Review: All Your Questions Answered

Apple’s Other Billion-Dollar Businesses

The iPhone is the crown jewel in Apple’s crown, but the company also makes products and services that could be multi-billion-dollar businesses on their own.

The company pulled in $9.2 billion from services, which include Apple Music, iCloud, Apple Pay and the App Store. That’s a 31 percent jump year-over-year. Apple’s revenue from “other products,” which lumps together the Apple Watch, AirPods, Apple TV and HomePod, was up 38 percent to $3.95 billion.

Apple is bullish on services, in particular, because the company’s install base of devices has exceeded 1.3 billion — that means that there are tons of people with iPhones, iPads, Macs and Apple Watches who may subscribe to Apple Music or need iCloud storage or buy apps from the App Store at some point.

It’s not just one service in one part of the world that is responsible for that growth, Cook told analysts, though the company doesn’t break out revenue by service. Each service is performing well in each part of the world that Apple operates, and each is growing.

Greengart pointed to the services category’s growth quarter-over-quarter, which is a tough feat to pull off considering Q2 follows the holiday quarter, where Apple typically puts in its best performance.

“Subscriptions are playing a big role there,” Greengart said. “Apple's ecosystem is like a flywheel — once you get it going, it's easier to keep it going.”

MORE: Fitbit Versa vs. Apple Watch: Which Smartwatch Wins?

Outlook: $$$$

Apple didn’t separate HomePod sales from the devices in its “other products” category, but the smart speaker has room to grow. Critics agree that the HomePod is a solid speaker, but it’s designed for Apple Music subscribers and could stand to be more well-rounded. (Siri could also use some improvements.)

Cook didn’t have much to say about devices in the pipeline, but he did say that health care is of particular interest to Apple.

Meanwhile, the company is sitting on a pile of cash that it can’t figure out what to do with, so it’s buying back $100 billion in stock from shareholders.

Caitlin is a Senior editor for Gizmodo. She has also worked on Tom's Guide, Macworld, PCWorld and the Las Vegas Review-Journal. When she's not testing out the latest devices, you can find her running around the streets of Los Angeles, putting in morning miles or searching for the best tacos.

  • SkOrPn
    If Apple wants to grow even further, they should also release a Android version of the iPhone. I will NEVER EVER buy an iPhone as it is, but I would instantly buy it if they offered one Android based. Want to kill your competitors? Then attack from all sides... There are hundreds of millions of people who just want an Android phone. Sell to EVERYONE who wants a smartphone, that would be my plan.
  • ash26rana
    i totally agree with SKORPN
  • tomguide65
    me to agree on this
  • ash26rana
    I to agree,wish iphone has android version to..
  • bpchristensen
    SKORPN, you probably haven't been around Apple long enough to understand that your suggestion would run contrary to almost every core value that Apple has historically held since its founding. As I recall, they tried it once while Steve Jobs was gone but it was a DISMAL failure. In fact, if Apple ever DOES offer an android phone, I'll know its time to sell all my Apple stock, because they will have lost their vision (they are already close in some areas)...
  • webgtlnbrgrs
    Now that the GEEK's and diehards have one, bragged to all their friends and the new car smell is gone... we will see, they still owe big bucks to pay them off like my kids, we will see... I still have my old clunker 7 Plus with a failing battery that needs replacing.... If they don't change the one only face recognition I will never own an "X" model … and I'm sure no one cares what I think …..
  • webgtlnbrgrs
    Why would Apple legitimize Android and pay the royalties to produce one when they have the best phone and operating system on the market, and their sales back up what I just said ….