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Investing.com – Apple (NASDAQ:AAPL) stock was weaker by 1% in Wednesday’s premarket trading on worries that a global shortage of chips could now begin to hurt manufacturing of its most prized product, the iPhone.
A likely slowdown in the company’s services, a product line that now contributes more than a fifth of the company’s total revenue, also weighed on sentiment.
Apple CEO Tim Cook told Reuters: “We do have some shortages. . .where the demand has been so great and so beyond our own expectation that it’s difficult to get the entire set of parts within the lead times that we try to get those.”
His comments come only a week after reports suggesting that Apple is planning a big increase in iPhone output this year, anticipating a wave of upgrades as 5G services are rolled out worldwide.
The pandemic-induced demand for gadgets like laptops, mobiles and printers has stayed elevated as companies and individuals adopt a blended office-home lifestyle.
The company had a record third quarter through June 26, and handily beat analysts’ estimates.
Consumers purchased more of its premium 5G phones like iPhone 12 Pro and 12 Pro Max and more people in China sought to pair Apple watches with iPhones.
The company’s total revenue hit $81.43 billion, up 36% year-on-year and easily surpassing the $73.26 billion analysts expected. Profit soared 93% to $21.74 billion, or $1.30 per share, higher than the $1.01 consensus.
iPhone sales rose 50% and comprised 48% of total revenue. Sales of iPads and Macs came at $7.37 billion and $8.24 billion, respectively.
Sales in China rose 58% to $14.76 billion.
Services revenue in the quarter rose by a third to $17.49 billion. That’s an all-time high, but Chief Financial Officer Luca Maestri had a word of caution during a call for analysts.
“We expect still-significant growth in services but not to the level that we’ve seen in June,” he said.
Apple now has 700 million subscribers across its various platforms that include App Store, Apple TV and Apple Music among others.
