Apple closes in on becoming the world's first US$1 trillion company

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Apple (NASDAQ:AAPL) posted the strongest third quarter in the company's history since it managed to beat analyst expectations for earnings per share and revenue.

Things are pretty dire for Mac sales, which have slumped to a seven-year-low of 3.72 million.

Analysts are predicting iPhone sales to be up slightly on a year ago, but revenue to rise further thanks to the higher price of the iPhone X, which Apple said, when announcing its last set of results, was its best-selling phone. During the conference call, Cook noted that the iPhone X was the most popular iPhone in the third quarter. In the last quarter, Apple's services made $9.5 billion, making it the second-largest business segment for the firm. The company's net income for the quarter was $11.52 billion compared to $8.72 billion a year ago.

Apple is on the cusp of becoming the world's first trillion-dollar company after smashing Wall Street forecasts with a leap in profits. The forecast is a measure of how well Apple thinks it can fare in a market where consumer interest in having the latest and greatest continues to wane. The category includes AirPods headphones, the Apple Watch, Apple TV, and the HomePod.

There is also a sense that the days of soar-away sales are behind the mobile phone industry and investors are now more focused on Apple's services business - which includes Apple Music, iCloud and Apple Pay - for future growth.

But several of Apple's services do not face strong rivals.

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Billions of dollars that Apple has been spending to buy back shares could help propel the company past the one-trillion-dollar mark for market value.

Shares of the company are up 13.44% since the beginning of 2018. The revenue included $236 million from resolving lawsuits such as Apple's long-running dispute with Samsung Electronics Co Ltd.

Cook said that Apple products have not so far been directly affected, and that the company is evaluating the latest Trump move now in a public comment phase. This translated to diluted earnings per share of $2.34, compared to $1.67 during the same quarter in 2017.

The company said it expects gross margins of 38 percent to 38.5 percent in the fourth quarter, compared with analyst expectations of 38.3 percent, according to Thomson Reuters I/B/E/S. Analysts are also closely watching Apple's operating expenses, which have been increasing as its research and development costs outpace its revenue growth.

The company generated $53.3 billion in revenue during the quarter ending June 30, compared to $45.4 billion during the same quarter previous year.

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