Apple, the world’s first company to be valued at $1 trillion, continues to grow at speed and has announced a double-digit increase in revenue.

Slightly exceeding projected revenues, with $62.9bn, the tech giant is up roughly 20% over last year.

The chief executive, Tim Cook, and chief financial officer, Luca Maestri, cited strong performances from services like iCloud, Apple Music, and the App Store, which reached an all time high of $10bn.

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Cook said in a statement the company was “thrilled to report another record-breaking quarter that caps a tremendous fiscal 2018, the year in which we shipped our 2 billionth iOS device, celebrated the 10th anniversary of the App Store and achieved the strongest revenue and earnings in Apple’s history”.

However, Apple stocks dropped 7% in extended trading as Cook warned that sales for the crucial holiday quarter would likely miss Wall Street expectations. He blamed a weakness in emerging markets such as Brazil, Russia and India for the more downbeat outlook.

The fall wiped about $70bn off the company’s market value, taking it below the trillion dollar mark.

The emphasis on services might signify a shift in the company’s focus. In the future, Apple may lean less on product sales, which have become somewhat static.

In this quarter, the company shipped 46.8 million iPhones, a 13% increase over last quarter’s 41.3 million sold. The iPhone XS, the latest model that was released in September, likely won’t show up in sales until next quarter, but analysts are expecting an overall slowdown in sales going forward.

“People just aren’t buying smartphones like they used to,” Jim Cridlin, the global head of innovation and partnership at Mindshare, a media agency owned by WPP. “In addition to that, consumers are moving beyond the screen. Voice and automated reality are changing the way consumers react and interact with their phones,” he added, explaining that, like its competitor Amazon, Apple might be foregoing its core business, in favor of future growth.

Cridlin says ads could be the next big thing for Apple.

“The model they have set up around app advertising right now is pretty compelling,” he says, adding that in recent years Apple has become the largest marketplace for apps. “If you want your app to be surfaced, you have to pay for that real estate now.”

It has also helped that the company has increasingly been branded as one of the most trustworthy on data protection, and is not embroiled in controversy like many of its big-tech competitors. For years, Cook has criticized companies like Google and Facebook over their handling of consumer data, and called for more government oversight.

It has been a winning way, positioning Apple as a leader on safety, solidifying mistrust of other companies and manifesting a regulatory environment that could cause headaches for other tech companies.

In June, Apple ramped up data privacy efforts, restricting app developers’ capabilities to collect data from iPhones. The move hit services like Onavo Project – a Facebook-owned data security app that promises protection while it feeds user information to its parent company’s platform.

In a keynote speech at an international conference on data privacy in October, Cook congratulated the European Union for cracking down on companies’ use of consumer data, accusing other businesses of creating an environment where our data is “weaponized against us”, and called for the US to follow in the EU’s footsteps.

Earlier in the year, the CEO directly censured Facebook’s founder and chief executive, Mark Zuckerberg, warning that he believed privacy “is a human right, a civil liberty” and vowing that his company wouldn’t monetize its customers as Facebook does.

Cook’s actions may help tackle the daunting data privacy issues he has raised, but they are also a boon for his business. A joint SurveyMonkey/Record poll in April found that Americans listed Apple among the most trusted companies in big tech.

“This plays to Apple’s strengths,” Cridlin says, adding that a study his company conducted found that 80% of adults across the world care about the issue. But, he adds, the strong rhetoric from Apple’s CEO will probably require the company to limit its ad offering to within Apple’s own world of apps and products.

“There are rumors that they have been exploring an ad network by partnering with folks like Pinterest, and Snapchat, and others,” he explains. “Once you do that, you open the data up to the wider platform. By keeping its ad offering, at least the way it is right now with consumer data all to itself, [Apple] can still wholly control it.”

If Apple doesn’t expand its ads, though, the company’s growth could come up against a wall. Much of Cook’s criticism centers on how other companies handle data; it’s still unclear how the company will better navigate the obstacles. “At that point it will be interesting,” Cridlin says. “Will they take a different stance so they can expand beyond their ecosystem, or not? Its stance on data privacy likely will be tested.”