According to Wedbush analyst Daniel Ives, Apple sold more than 40 million iPhone 13 units during the holiday season, setting a new record for the company. The sale volume is remarkable considering the ongoing global chip shortage and demand for Apple products outstripping their supply.

In a note to investors, the analyst remarks that demand for the iPhone 13 remained strong going into 2022, contrary to reports last year that suggested demand was slowing ahead of the holiday season. During the December quarter, delivery times for the iPhone 13 models began to improve as supply chain issues ironed themselves out.

“Based on our supply chain checks over the last few weeks, we believe demand is outstripping supply for Apple by roughly 12 million units in the December quarter which now will add to the tailwinds for Cupertino in the March and June quarters as the supply chain issues ease in 1H22.”

Ives notes that China has played a significant role in strengthening Apple’s sales over the last 12 months. The company’s market share in the country also increased, thanks to the “multi-year supercycle” caused by the iPhone 12 and iPhone 13.

According to the analyst, the growing hype for Apple’s mixed-reality headset expected sometime this summer will also help drive iPhone sales. He added that around 230 million of the 975 million iPhone users worldwide have not upgraded in the last 3.5 years.

The note mentions that Apple’s services business alone is now worth around $1.5 trillion, making it a “linchpin” to Apple’s climbing valuation. The company’s services include Apple Music, iCloud, Apple TV+, and Apple Fitness+.

In summary, Ives says that despite the chip shortage and supply crunch, Apple’s shortages were a “transitory issue” and “nothing more than a speed bump” en-route to becoming the world’s first company with a $3 trillion market cap in 2022. Touching that milestone would be another “watershed moment for Apple,” he said.