Ahead of today's earnings call covering the fourth fiscal quarter of 2019, Apple CEO Tim Cook said in an interview with Reuters that iPhone 11 sales are off to a "very, very good start" so far, and the launch has led to improved sales in key markets like China.
In China in particular, the lower $699 starting price of the iPhone 11 is "more similar to the price points that [Apple] had great success with in the past," Cook said, which helped drive sales.
Apple is predicting strong holiday quarter sales with guidance between $85.5 billion to $89.5 billion, and Cook said that the guidance is based on strong sales of services and wearables as well as promising early sales of the new 2019 iPhones. Apple no longer provides specific sales data on the iPhone, so it's difficult to determine how many of the new devices that Apple sold.
Cook said that the numbers also reflect Apple'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," Cook said. "I certainly hope it happens during the quarter, but we'll see about that."
Lowering iPhone prices for older iPhones in China has also helped slow mid-year sales declines. iPhone sales in China picked up towards the end of the quarter, and Apple also saw double-digit services revenue growth in China. Cook attributed it to several factors during the earnings call:
We had a very good September in the lead of that is sort of the reception of iPhone 11 and 11 Pro and 11 Pro Max and so we feel really good about how we've gotten started there. As you can tell from the numbers, we've significantly improved from the beginning of the year.
There's a very slight growth there. We obviously want that to be better, but we feel good about how we're doing. I think it's a combination of things that have turned things around. On a macro basis, I think the trade tension is less, which clearly looks positive.
Secondly, the products have been extremely well received there. Third, the things that we've done from a pricing, financing, and trade-in point of view, all of these things have moved the dial. It's the sum of all that.
Cook also said that services, wearables, and other devices played a role in growing revenue in China alongside the iPhone. "Lots of positives there," he said.