Apple shipped 40.4 million iPhones in the third fiscal quarter, above the 40.02 million expected by StreetAccount estimates.
"At its launch, we said the addition of the iPhone SE to the iPhone lineup placed us in a better position to meet the needs of customers who love a 4-inch phone, and to attract even more customers to our ecosystem," CEO Tim Cook said in a conference call with investors. "In both cases, that strategy is working."
The company debuted the iPhone SE in March for $399 for the 16GB model, much lower than a traditional iPhone debut. It had mixed response on Wall Street, where some worried it wasn't as drastic of an upgrade as other models, and might erode sales of higher-end models.
Cook said the phone is popular in both developed and emerging markets, and those switching from other carriers accounted for the highest percentage of quarterly iPhone sales Apple has ever measured.
Analysts have expressed widespread concerns that consumers aren't upgrading their iPhones as often as they used to. But Tim Cook told CNBC he feels fantastic about how the iPhone did, and that it will be more important than ever looking forward. Indeed, Apple could be near the sale of its billionth iPhone, said Andy Hargreaves, Pacific Crest analyst.