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Apple Holiday Forecast at Low End of Expectations

This holiday season is looking good, but not great (for now).

Apple

Will there be a big holiday surprise for Apple investors? Maybe.

The Cupertino technology giant said it expected sales of $75.5 billion to $77.5 billion in the coming December quarter, an indication that it will sell a record number of iPhones but perhaps not as many as some analysts had hoped. Wall Street expected Apple to forecast sales of about $77.1 billion.

Sanford C. Bernstein & Co. technology analyst Toni Sacconaghi estimated that Apple would generate revenue of $75 billion to $78 billion and per-share earnings of $3.15-$3.35 and that would signal iPhone sales in excess of 75 million units for the holiday period, compared to the 74.5 million phones it sold in the 2014 holiday quarter.

“Given investors’ unrest about iPhone demand, the key question is whether Apple might do anything to alleviate concerns: Might it comment about its broad expectation for iPhone unit growth for all of FY 16?” wrote Sacconaghi.

Apple did not provide full-year 2016 guidance.

Chief Executive Tim Cook sought to reassure Wall Street that smartphone sales will continue to grow in the December quarter, as a record number of Android users switch to iPhone and the majority of current iPhone users have yet to upgrade to the latest device. Meanwhile, the company sees more opportunities for growth in emerging markets as well as in China, which Apple believes will one day surpass the United States in sales.

“We believe iPhone will grow in Q1,” Cook said.

In its September quarter, strong initial sales of the latest iPhone helped Apple surpass Wall Street’s expectations. Apple reported a profit of $11.1 billion, or $1.96 a share, in its fiscal fourth quarter ending Sept. 26. Revenue rose 22 percent to $51.5 billion, thanks to strong sales in China and a healthy consumer response to the new iPhone 6s and 6s Plus. Wall Street expected Apple to report a profit of $1.88 per share on revenue of $51.12 billion, according to Thomson Reuters.

The iPhone remains Apple’s cash cow, accounting for more than half of the company’s revenue.

Apple said it sold 48 million iPhones in its fiscal fourth quarter, an increase of 22 percent from last year’s introduction of the hot-selling iPhone 6 and 6 Plus. That fell short of analyst estimates that Apple shipped as many as 48.7 million iPhones in the September quarter.

The new iPhone 6s and 6s Plus reached stores with just two days left in Apple’s September quarter — though sales were buoyed by the new device’s availability, at launch, in China. Research firm Strategy Analytics estimates that mainland Chinese consumers purchased as many as 10 million iPhones in the quarter.

Apple’s sales in Greater China, its second-largest market, doubled to $12.5 billion in the September quarter. The region has accounted for one of every four iPhones purchased over the last three quarters, and could well fuel 90 percent of Apple’s revenue growth in the coming holiday quarter, according to Bernstein Research.

Apple shares rose nearly 2 percent to $116.64 in after-hours trading.

This article originally appeared on Recode.net.