Apple last night painted a rosy picture for its new iPhones as it reported quarterly results, but investors were more focused on the company's next test - topping last year's record Christmas sales. 

Shares of the world's most profitable company initially rose 3% in extended trade after Apple beat Wall Street's sales and profit forecasts, but the gains largely evaporated later.

In the world's most important market for smartphones, Apple's sales in Greater China in its fourth fiscal quarter nearly doubled from a year ago to $12.52 billion, accounting for nearly a quarter of its total revenue.

"We continue to have wonderful success there," Apple's chief financial officer, Luca Maestri, told Reuters, adding that Apple now has 25 stores in China and is opening a new one roughly every month. 

But China sales dipped from the fiscal third quarter, when Apple notched $13.2 billion in revenue there. 

The sequential decline is important as many analysts believe China is poised to replace the US as Apple's biggest market.

Apple, the world's largest company by market value, said it sold about 48.05 million iPhones worldwide in its fiscal fourth quarter ended September 26, slightly below analysts' average forecast of 48.72 million. 

For the current quarter, which will include a full three months of sales of the new iPhone 6s and 6s Plus models, Apple forecast revenue between $75.5 billion and $77.5 billion. 

The company's generally conservative forecast was in line with Wall Street's average estimate of $77.17 billion, according to Thomson Reuters I/B/E/S. 

Boosted by a new pink or 'rose gold' colour option, Apple posted record sales of its latest iPhones in the first weekend that they hit stores in late September. 

The fiscal fourth quarter included only two days of sales of the new iPhones. The release of the iPhone 6 set off a sales frenzy last year, propelling Apple to the most profitable quarter ever for a US company.

Apple said its net income rose to $11.12 billion, or $1.96 per share, in the fourth quarter, up from $8.47 billion, or $1.42 per share, a year earlier.

Net sales rose about 22% to $51.50 billion. 

Analysts on average had expected a profit of $1.88 per share and revenue of $51.11 billion.