What Apple's latest results say about the future of the iPhone

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Apple’s latest results might have revealed the future of the iPhone. And it could be bad news for your wallet, even if it is good news for the phone in your pocket.

The figures are good news for Apple: amid suggestions that the sheen could be coming off the iPhone, the business just keeps growing. And that is not just in handset sales, with Apple’s other divisions also growing.

But that isn’t necessarily all motivated by people buying new Apple products. It is also customers spending more on the Apple products they buy – apparently motivated in large part by the popularity of the iPhone X, the most expensive handset Apple has ever made.

The results suggest that the risky strategy Apple adopted with the iPhone X is paying off. The premium, expensive phone had confused some analysts who said Apple would struggle to justify its huge price – but people appear to be paying it.

That suggests Apple will continue to offer the more expensive handsets, even as it begins to sell cheaper versions of the same technology found in the iPhone X.

The results also suggest Apple’s more long-term strategy of focusing on services seems to be paying off. Apple has looked to supplement its income from product sales by charging people for its range of online services, and customers are continuing to spend more on them.

That could indicate Apple will keep pushing those services, and encouraging people to pay for them. The tech giant could launch more services like Apple Music, for instance, as well as rolling out more features to those existing online services to keep people using them.

Average selling prices for iPhones were $728, compared with Wall Street expectations of $742. The figure is up more than 10 per cent from $655 a year ago, suggesting Apple’s iPhone X, which starts at $999, has helped boost prices.

Tim Cook said the increased selling prices had come in large part from the iPhone X, which he said had been the most popular phone every week since it came out.

“This is the first cycle that we’ve ever had where the top-of-the-line iPhone model has also been the most popular,” he said during the company’s earnings call.

Apple also made more money from people once they had bought those phones and became customers.

Apple’s business services – which includes Apple Music, the App Store and iCloud – posted $9.1bn in revenue compared with expectations of $8.3bn. Heading into earnings, investors were hopeful that growth in that segment could help offset the cooling global smartphone market.