If consumers are holding out for the next iPhone, they've still been spending plenty of money at Apple Stores in the meantime.
Shares were set to open at a record high Wednesday, with a market capitalization of over $830 billion, after the iPhone maker reported better-than-expected earnings.
The stock climbed more than 6 percent in extended hours trade and were set to open near $160 a share, on track to surpass the $156.65 intraday high set on May 15. The gains in Apple were also poised to push the Dow Jones industrial average over the psychologically key 22,000 level.
Apple reported fiscal third-quarter earnings on Tuesday that beat analysts' expectations, and revenue that topped estimates, as it sold more iPhones than expected.
Apple shares 2-day performance (extended hours)
Source: FactSet
Despite expectations for a "lame duck" quarter ahead of the iPhone 8 launch, Apple sold 41 million iPhones during the quarter, surpassing 1.2 billion total iPhones sold.
The company also hit a major goal, as the App Store drove Apple's Services division to a record high, the size of a Fortune 100 company.
"If you look at the products, we sold 41 million iPhones, but frankly it's better than that because we also reduced channel inventories by 3.3 million," CEO Tim Cook told CNBC's Josh Lipton on Tuesday.
"If you look across the world, we had several markets in Asia, in Latin America, and the Middle East which grew more than 25 percent year on year," Cook said. "If you look at [iPhone] 7 in the [iPhone] 7 Plus, we grew strong double-digit year on year compared to the 6S plus a year ago. So iPhone was terrific."
Here's how Apple did:
- Adjusted EPS: $1.67 per diluted share vs. $1.57 per share expected by a Thomson Reuters consensus estimate
- Revenue: $45.4 billion vs. $44.89 billion expected by a Thomson Reuters consensus estimate
- That's up compared with adjusted earnings of $1.42 per diluted share on revenues of $42.36 billion in the year-ago period.
- iPhone shipments: 41 million vs. 40.7 million expected by a StreetAccount consensus estimate
The shadow of the iPhone 8 looms large
Expectations are perhaps higher than ever for Apple's biggest cash cow, the iPhone, to deliver big sales this year.
"Well, I mean it's certainly better than expected, but ultimately I really don't think it matters that much," Ian Winer, co-head of equities at Wedbush, told CNBC's "Closing Bell" on Tuesday. "I think what matters is, when is the iPhone 8 actually going to get released? And what are people going to do with it? And ultimately the question is, are people going to pay $1,100 for a new phone or are they not? And ... is this the new iPhone super cycle or is it not?"
The company's forward guidance might provide some hints about the iPhone 8: Apple forecasts gross margin between 37.5 percent and 38 percent next quarter. That's lighter than the margins of 38.3 percent predicted by analysts polled by StreetAccount.
Apple also said on Tuesday it expects fourth-quarter revenue between $49 billion and $52 billion, a little on the heavy side. Analysts polled by Thomson Reuters expected Apple to forecast $49.21 billion in revenue in the company's fiscal fourth quarter.
The iPhone 8 — the phone that would mark the 10th anniversary of the original model — is expected to introduce radical new features such as brighter, edge-to-edge screens and augmented reality capabilities as soon as September. Plus, there's a slew of people with sixth-generation iPhones — one of Apple's best sellers — that might be due for an upgrade.
All these rumors have dampened excitement for Apple's current model, the iPhone 7, Cook said earlier this year. And unconfirmed reports of manufacturing delays have added an extra layer of uncertainty to the mix.
Nonetheless, analysts have speculated that features like voice compatibility with the new HomePod speaker could make Apple's ecosystem more useful for consumers, boosting Apple's ability to sell services such as Apple Music.
"If you look at Services, we came in at $7.3 billion, which was up 22 percent year on year, really great quarter," Cook told CNBC. "And we have now achieved our goal of being the size of a Fortune 100 company earlier than we thought."
Still, the company is not without challenges, especially in China, where sales fell 10 percent year over year this quarter and 14 percent year over year last quarter. Local competitors such as Huawei and Xiaomi have pressured Apple's market share, while Apple has added executives and bent to accommodate regulators in Beijing.
Cook told CNBC that the company still feels "great" about third-quarter performance in China, accounting for currency.
The American political landscape may play an even greater role in Apple's future. Cook has been an outspoken critic of the U.S. tax code, and has rallied behind issues such as encryption, gay and transgender rights, immigration, education and the environment.
But with a giant pile of cash held mostly overseas, Apple could be a big beneficiary of change at the White House. Apple's cash pile hit a new record of $261.5 billion during the quarter. It also declared a 63 cents per share dividend, the same as last quarter.
Rounding out Apple's product sales, the company also reported 11.42 million iPads shipped vs 9.03 million units estimated and 4.29 million Macs shipped vs 4.33 million units estimated. Though Apple does not break out sales of AirPods or Apple Watch, Cook told investors on a conference call that sales of Apple Watch were up 50 percent.
Apple has historically beaten its EPS estimates 88 percent of the time and revenue estimates 76 percent of the time since 2009, according to Birinyi Associates data.
Apple quarter better than expected: Matrix's David Katz
— CNBC's Robert Hum, Christine Wang, Steve Kopack, Josh Lipton and Rachel Cao contributed to this report.