Apple’s revenue from India was “an all-time quarterly record” for the quarter ended December 31, 2017 (Q1 2018), Apple CFO Luca Maestri said during the company’s earnings call. He added that the company registered “double digit revenue growth in all our geographic segments.” Apple posted all-time quarterly records in revenue in several other markets, including the US, Western Europe, Japan, Canada, Australia, Korea, Mainland China, Latin America, the Middle East, and Central and Eastern Europe.

This was Apple’s biggest quarter in terms of revenue, in its history. The company posted revenues of $88.3 billion, up 13% year-on-year (YoY) from $78.35 billion in Q1 2017. Apple CEO Tim Cook also mentioned that in January 2018, Apple’s active installed base of devices (including iPhone, iPads and Macs) reached 1.3 billion, which is an increase of 30% in two years.

Mac

Apple sold 5.1 million Macs during the quarter. “Mac performance was particularly strong in emerging markets with unit sales up 13% YoY and with all-time records in Latin America, in India, Turkey and Central and Eastern Europe,” mentioned Maestri.

In mid-December, Apple launched the new iMac Pro, with additional “computational power, for simulation and real-time 3D rendering, immersive VR and complex photography, audio and video projects,” said Cook. He added that during this quarter, 60% of the Mac sales were first time buyers, across the world, and that in China this number increased to 90%.

iPhone

The revenue generated from iPhone sales was the highest ever in this quarter. iPhone X, iPhone 8 and iPhone 8 Plus were the top three selling iPhones in Q1 2018. Apple sold 77.3 million iPhones in this quarter, and its average weekly iPhone sales was up 6% YoY. The average selling price (ASP) for iPhones also increased to $796 from $695 in Q1 2017.

Answering an analyst question regarding Apple’s decision to lower prices of battery replacements of certain iPhone models, Cook said that they didn’t take into consideration how phone upgrade rates might be affected while taking that decision. “We did it because we thought it was the right thing to do for our customers. And sitting here today, I don’t know what effect it will have,”he added.

In December last year, Apple confirmed that the feature meant to deal with ageing batteries in older iPhones does temporarily slow down performance. Later it said that it will allow users to disable the feature.

iPad

For the third quarter running iPad revenue grew. The company sold 13.2 million iPads in Q1 2018. “iPad sales grew double-digits in many emerging markets, including Latin America, the Middle East, Central and Eastern Europe and India, as well as developed markets, including Japan, Australia and Korea.” informed Maestri.

Globally, nearly half of the iPad sales were to first-time buyers or buyers switching over to Apple. Cook said that this was “true in some of our most developed markets, including Japan and France. In China, new and switching users made up over 70% of all iPad sales.”

Apple Watch & Other Wearables

For the fourth quarter in a row, Apple Watch posted over 50% growth in revenue and units sold. In fact, Q1 2018 was the best quarter ever for Apple Watch. “When we add the results from Beats and AirPods, our total revenue from wearables was up almost 70% year-over-year. In fact, wearables were the second largest contributor to revenue growth after iPhone,” added Maestri.

Services

Services revenue stood at $8.5 billion for the quarter, up 18% YoY. In terms of average revenue per week, services revenue was up 27% YoY, as compared to 24% in Q4 2017. Revenue from paid subscriptions stood at $240 million for the quarter, up 58% YoY.

Apple Pay

Apple Pay registered a 50% YoY growth in merchant adoption. Cook said that now Apple Pay is accepted at over “half of all American retail locations, which includes more than two-thirds of the country’s top 100 retailers.” Globally, Apple Pay is available in 20 markets, where purchase volume tripled YoY in Q1 2018. Cook mentioned that the payment service is expected to launch in Brazil in the coming months, but didn’t provide any specific date. In December, Apple also launched the P2P payment service Apple Pay Cash, in the US. Cook claimed that “millions of people are already using it to send and receive money with friends and family, to split a bill, pay someone back, or send last minute gift right from the messages app.”

App Store & ARKit

“During the week beginning December 24th, a record number of customers made purchases or downloaded apps from the App Store, spending over $890 million in that seven-day period, followed by $300 million in purchases on New Year’s day alone,” said Maestri.

The App Store now has over 2,000 ARKit enabled apps. ARKit was launched in September 2017, and since then the company has also released ARKit 1.5 in beta to developers.

China

In Greater China, Apple posted double digit revenue growth for the second quarter in a row, and in emerging markets outside of Greater China, there was a growth of 25% YoY.

HomePod

Apple’s wireless speaker, HomePod was launched on February 9. It can be synced with Apple Music and Siri is available to provide voice-based interaction. “But (it) also can handle request to like home automation to close your garage door, open your door, turn the light on, turn the fireplace on, change the thermostat, all of the things that you would like to do in home automation,” said Cook. It can also be used as a speaker phone, to make calls, send messages, book a Uber, etc. Cook added that some people will use it mainly as a speaker, while others can use it primarily for digital assistance.

Other Highlights

Download: Financials