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by Jason Snell & Dan Moren

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By Jason Snell

Apple announces record profits, earnings, and iPhone sales

Note: This story has not been updated for several years.

To say that the last three months of 2014 were record setting for Apple would be an understatement. Not only did the company set records for profit ($18 billion) and revenue ($74.6 billion), but it also sold a mind-boggling 74.5 million iPhones.

“Interest in Apple products is at an all-time high,” Apple CEO Tim Cook said today on a conference call with analysts after the company released its quarterly financial results. “Demand for iPhone has been staggering… On average, we sold over 34,000 iPhones every hour, 24 hours a day, every day of the quarter.”

Mac sales were 5,519,000, only about a thousand Macs lower than the all-time-record Mac sales number the company put up the previous quarter, and up from the 4.8 million Macs sold during the holiday quarter of 2013.

Meanwhile, sluggish sales of the iPad continued. The company announced 21.4 million iPad sales, more than four million less than the company sold during the previous holiday quarter.

Cook said that he’s still “optimistic and bullish” on the iPad, though, citing high numbers of first-time buyer rates: “If you look at some of the developed markets… 50 percent of the people are buying an iPad for the first time. If you look in China it’s over 70 percent. And so when you have that kind of first-time buyer rates, you don’t have a saturated market.”

Cook also suggested that the iPad’s upgrade cycle is “probably between an iPhone and a PC,” and suggested that there’s “probably some level of cannibalization that’s going on” with the iPad stuck between the Mac and the iPhone. But in the end, the CEO said that he believes “over the long arc of time, the iPad is a great business.”

Apple showed big growth in China, 70 percent over the previous holiday quarter. The $16 billion in revenues in Apple’s “greater China” region moved within spitting distance of the $17 billion in European revenue. (The U.S. remains Apple’s strongest geographical region, with $30.6 billion in revenues during the holiday quarter.)

“Growth was absolutely stunning in Brazil and mainland China, more than doubling year over year, which is a 3-4x what those markets were doing according to IDC,” Cook said. “I’m really proud of how we’re doing [in China]… You can tell that we’re a big believer in China, we’re looking at our investment, we’re growing the number of stores, we’ll hit 20 soon and we’re doubling that by mid 2016. We’re also growing the channel there, our online store has expanded to over 350 cities now, and in fact our online revenues in China last quarter were more than the sum of the previous five years. And so, it’s an incredible market.”

In addition to crowing about Apple’s (eminently crowable) quarter, Cook also declared that 2015 would be “the year of Apple Pay.” According to Cook, Apple Pay is responsible for two-thirds of dollars spent on contactless payment systems from the three major U.S. credit card networks. At Panera Bread, he said, Apple Pay represents nearly 80 percent of mobile payment transactions, and that Whole Foods claims that mobile payments have increased 400 percent since Apple Pay launched.

In addition, Cook promised more growth in the company’s HealthKit, HomeKit, and CarPlay initiatives to connect Apple tech to health data, home devices, and car entertainment systems, respectively.

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