Apple said on Tuesday that iPhone sales in the third fiscal quarter were 39.57 billion U.S. dollars, an increase of nearly 50% year-on-year, higher than analyst expectations.

Apple’s quarterly sales and profits announced on Tuesday exceeded analysts’ expectations because consumers bought a high-end version of its 5G iPhone and signed up for the company’s subscription service.

Refinitiv’s IBES data shows that driven by better-than-expected iPhone sales, total revenue reached US$81.43 billion, higher than analysts’ expectations of US$73.30 billion. According to data from Refinitiv, earnings per share were 1.30 US dollars, higher than the estimate of 1.01 US dollars per share.

Apple’s strongest sales growth came from China, where CEO Tim Cook told Reuters that customers are buying Apple Watch and other accessories to pair with iPhone. In the third fiscal quarter ended June 26, sales in China increased by 58% to US$14.76 billion.

“It’s not just the iPhone.” Cook told Reuters in an interview that we have set a new quarterly record for Macs, wearables, home and accessories, and services in China. “This is our strongest geographic environment. “

So far, Apple seems to have avoided a major blow to the global chip shortage.

When the results were announced, investors who were worried that Apple would rely too much on sales of its iconic computing device, the iPhone, had pushed the company’s value to nearly $2.5 trillion, more than doubling in about three years.

These investors have now begun to view the iPhone as the consistent center of a series of related purchases in the Apple ecosystem, from watches and wireless earbuds to apps and paid services, rather than risks.

Apple introduced the iPhone 12 models, all of which can be connected to a faster 5G wireless network thanks to Qualcomm’s chips, which is later than last year. Because this delay delayed some iPhone purchases that would normally occur in the company’s first fiscal quarter to the second fiscal quarter, executives warned investors that the decline in iPhone sales in the third quarter is expected to be greater than usual because of consumption. People began to anticipate a new generation of mobile phones.

But the impetus for the 5G upgrade seems to be pushing the iPhone purchase cycle better than many analysts expected. Apple said that iPhone sales were 39.57 billion U.S. dollars, an increase of nearly 50% over the same period last year and higher than analysts’ expectations of 34 billion U.S. dollars.

Cook told Reuters that Apple’s iPhone 12 Pro and 12 Pro Max are high-end products of the device with strong sales. Refinitiv’s data shows that this helped push the gross profit margin to 43.3%, higher than the expected 41.9%.

Another major driver of Apple’s performance is its service business, which includes paid subscriptions for TV and music and its App Store. Service revenue reached a record of 17.49 billion U.S. dollars, an increase of one-third over the same period last year and higher than analysts’ expectations of 16.33 billion U.S. dollars. Cook told Reuters that Apple now has 700 million users on its various platforms, up from 660 million before the first quarter.

Cook said that Apple has set quarterly sales records in many of its first-party services, including its AppleCare hardware insurance plan, which slowed down during the pandemic, when many of the company’s retail stores were closed.

But Apple did encounter setbacks. Last quarter, Apple told investors that the global chip shortage could reduce sales by US$3 billion to US$4 billion, mainly due to the shortage of secondary chips made by the old technology used in the iPad and Mac.

Cook told Reuters that due to the chip shortage, Apple can sell a limited number of Macs and iPads, but the impact of the shortage on Apple’s overall revenue is “lower than the low end of its previous forecast.” According to data from Refinitiv, iPad and Mac sales were 7.37 billion U.S. dollars and 8.24 billion U.S. dollars, respectively, while analysts expected 7.15 billion U.S. dollars and 8.07 billion U.S. dollars.

In the long run, Apple’s service business faces regulatory risks. The company’s practice of charging 15% to 30% commissions to developers who sell in its App Store and require them to use Apple’s payment system may face scrutiny by U.S. and European regulators, and legislators in these countries have also proposed possible restrictions Some Apple’s practices.

The antitrust lawsuit filed by the creator of “Fortnite” Epic Games against Apple is also expected to be ruled in the next few months.