Tech giant Apple has posted record sales of its flagship smartphone, the iPhone, eclipsing predictions over the holiday period with a bigger-than-expected rise for the December quarter.

The company sold 78.29 million iPhones in the quarter to December 31, compared to 74.78 million last year, according to Reuters.

The smartphone outperformed estimates from analysts, which put sales at 77.42 million, according to research firm FactSet StreetAccount.

The positive result marks a turnaround for Apple after it posted a fall in profit in 2016, a first for the company in 15 years.

It comes despite slowing demand for smartphones and as Apple competes with an increasing number of cheaper Android alternatives, according to Reuters.

Popular games such as Pokemon Go, Super Mario Run and subscriptions helped the tech giant’s services business, which includes App Store, Apple Pay and iCloud, record an 18.4 percent growth in revenue.

The company also reported an increase in sales in its personal computing division, due to an update to its MacBook Pro line of notebooks, reported TechCrunch.

“We’re thrilled to report that our holiday quarter results generated Apple’s highest quarterly revenue ever, and broke multiple records along the way,” said Apple chief executive Tim Cook, according to The Telegraph.

“We sold more iPhones than ever before and set all-time revenue records for iPhone, Services, Mac and Apple Watch. Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline.”