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Apple smashes the opposition with 74.5m iPhones and $18bn profit

Posted on by Mike Evans

Bigger is better and more lucrative, if Apple's results are to be believed. But has the iPhone 6 Plus begun to cannibalise sales of the iPad mini?

Bigger is better and more lucrative, if Apple's results are to be believed. But has the iPhone 6 Plus begun to cannibalise sales of the iPad mini?

So busy was I taking photographs this evening that I almost forgot to anticipate Apple's quarterly earnings call. The results were forecast to be a blockbuster but, in the event, the Colossus of Cupertino has soundly out-paced the analysts by moving no fewer than 74.5 million iPhones in the quarter to December 31. Revenue soared to $74.6bn and profit to $18bn.

Even more interesting is that gross margins, which had been shrinking of late, have bounced back to just under 40 percent, up from 37.9 percent in the same quarter in 2013.

The iPhone figures are well beyond expectations, up more than 50 percent from the same period last year, but the iPad market shrunk, as expected, to 21.4m units from 26m. While this is a continuing trend for the iPad, there is some possibility that the larger iPhone 6 Plus has cannibalised iPad sales, particularly those of the iPad mini. As an aside, Tim Cook disclosed that the company has now sold one billion iOS devices since Steve Jobs introduced the iPhone in 2007.

Macs also did exceptionally well in the quarter, notching up strong sales of 5.5m units compared with 4.8m last time. Some of this will be accounted for by the introduction of the retina-screened 5K iMac which, by all accounts, has been a major success. Certainly it has been a success for me. I love it. 

Apple shareholders will be pleased to hear that the quarterly dividend will be a record 47 cents per share, while they can take comfort from the fact that Apple now holds $178 billion in cash. Some countries would kill for that. 

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