Apple posted record revenue and profit in its fiscal Q1, as a slight dip in iPhone shipments was offset by an increase in the average selling price and strong growth in its wearables segment.

Profit of $20.1 billion in Apple’s fiscal Q1 2018 (covering the three months to 30 December 2017) was up from $17.9 billion in fiscal Q1 2017 (which ran to 31 December 2016). Revenue grew from $78.4 billion to $88.3 billion in the recent period.

iPhone shipments decreased 1 per cent year-on-year to 77.3 million from 78.3 million in the same period of 2016. The drop was the first in Apple’s fiscal Q1 history since 2008. However, CFO Luca Maestri noted the reporting period was one week shorter than usual and said average weekly iPhone shipments were up 6 per cent compared to the same period of 2016.

The slip didn’t impact iPhone revenue, which grew 13 per cent year-on-year to $61.6 billion driven by a massive leap in average selling price from $695 in fiscal Q1 2017 to $796 in the recent period. Maestri attributed this jump “primarily to the launch of iPhone X,” which carried a base price of nearly $1,000.

CEO Tim Cook (pictured) said iPhone X was the top-selling iPhone every week since shipping began in November.

Shipments of Apple’s iPad tablet barely budged, inching up from 13.08 million in the vendor’s fiscal Q1 2017 to 13.17 million units in fiscal Q1 2018, though revenue grew 6 per cent to $5.9 billion. By contrast, revenue from Apple’s wearables, including its Watch; and Beats and Airpods headphones, was up almost 70 per cent year-over-year. Maestri didn’t breakout the figure, but noted wearables were the second-largest contributor to revenue growth after the iPhone.

All told, revenue from Apple’s Other Products category, which also includes Apple TV, iPod and branded accessories, grew 36 per cent year-on-year to $5.5 billion.

Upgrades and batteries
Questioned about Apple’s view on upgrade rates, Cook acknowledged consumers in markets like the US which used to benefit from smartphone subsidies are now holding on to their devices longer. But he added upgrade rate concerns did not factor “in any way, shape, or form” into the company’s decision to offer discounted battery replacements in the wake of recent iPhone performance throttling revelations.

“We did it because we thought it was the right thing to do for our customers. Sitting here today I don’t know what effect it will have,” Cook said.