Apple is climbing after topping Wall Street's earnings expectations (AAPL)

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Apple is climbing after topping Wall Street's earnings expectations (AAPL)

To hit the trillion-dollar market value, Apple shares would have to climb about five percent. Its mobile unit reported a 22 percent drop in sales revenue to $20.2 billion from the same time a year ago. That was a gain of 17%, topping Wall Street's expectations and Apple's own internal forecast. Apple's stock is up 3.2% in after-hours trading.

Apple is well on its way to crossing a historic milestone and becoming the first company ever with a $1 trillion dollar valuation.

"Apple Music grew by over 50 percent on a year-over-year basis", Cook said during Tuesday's earnings call, where he also called out that more than 300 million users now subscribe to apps with subscription tiers available on the App Store. While unit sales have slowed recently, the company is building digital services and a suite of other gadgets around the device.

The 6.1- and 6.5-inch iPhones represent two of the three models Apple is reportedly planning for this fall's round of phone releases. Maestri told Reuters that sales from Apple Care, the company's warranty offering, were up 27 percent versus a year ago, though the company did not disclose a dollar figure for sales.

The US tech giant unveiled quarterly results revealing that iPhone sales had jumped to 41.3m, a slight increase on a year ago. It still has about $10 per share, or 2%, to go. The Street had expected $2.18 per share and $53.31 billion, respectively. The company sold 41.3 million units, below expectations of 41.8 million units.

The average iPhone selling price hit US$724, beating analyst expectations of US$694, according to data from FactSet.

Apple has responded to a plateauing global smartphone market by launching ever-more expensive phones and diversifying into services. Analysts forecast US$9.2 billion.

Apple services include streaming music and video, where Apple faces competition from rivals including Spotify Technology SA and Netflix.

"We're on target to reach our goal of doubling our fiscal 2016 services revenue by 2020", CEO Tim Cook assured investors on the call. Paid subscriptions have now passed 300 million, he also noted.

Apple's revenue guidance for Q3 2018 fell between $51.5 billion and $53.5 billion, with gross margin estimated to be between 38% and 38.5%.

Another category potentially affected by tariffs is the Apple Watch, which is one of Apple's growth drivers. Cook said wearables were a highlight of the quarter, with sales up 60 per cent year over year. But Apple and Samsung are also eyeing other areas of their businesses for growth. Apple's Mac unit, which has been drawing complaints from consumers, reported a 5 percent drop in sales.

The firm said it sold 41.3 million iPhones in the three months to the end of June, up just 1% from previous year. In March, Apple launched an updated US$329 iPad geared toward students.

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