Apple Inc. posted a record-breaking profit of $18 billion in the fourth quarter of 2014 thanks to its bigger-screen iPhones and spikes in sales in China.
These earnings reflect the largest ever reported by a public company worldwide, said S&P analyst Howard Silverblatt, according to Reuters.
The company sold 74.5 million iPhones in the three months that ended Dec. 31, surpassing the expectation of many analysts, many of whom predicted sales of less than 70 million units. CNN reported that this number is equivalent to the sale of 34,000 iPhones every hour, every day, every week of that quarter.
Apple has successfully set records with each of its new iPhones, SF Gate reported. In the last quarter of 2013, it sold 51 million smartphones, with the iPhone 5S and 5C the latest models at the time.
The new iPhone 6 and 6 Plus have become largely popular as well, particularly because of their 4.7-inch and 5.5-inch screens, respectively, compared to the 4-inch screens on the iPhone 5.
“It took Apple a long time to come to grips with the fact that the market did want the bigger screen, said Gartner tech analyst Van Baker, according to SF Gate. “They finally closed the gap on a feature they were missing, which their competition had capitalized on.”
Excitement for latest iPhone models in China were phenomenal, said Timothy Cook, Apple’s chief executive.
“It’s an incredible market,” Cook said. “People love Apple products. And we are going to do our best to serve the market.”
In an interview with The New York Times, Apple’s Chief Financial Officer Luca Maestri did not disclose the number of iPhones sold in China, but said sales for the devices shot up 83 percent compared to the same quarter last year. Maestri told Reuters that, contrary to some earlier predictions by analysts, the company did not sell more iPhones in China than in the United States: most of its revenue came from the Americas, where it posted $30.6 billion in sales.
Apple has been making moves throughout the last few years to compete more aggressively in China, the Times reported. In late 2013 it struck a deal to sell iPhones with China Mobile, the world’s largest wireless network with more than 800 million subscribers. Apple is also planning on having 40 stores in greater China by mid-2016, Maestri told analysts in a conference call.
The rise in iPhone sales in the fourth quarter made up 69 percent of Apple’s revenue, compared to 56 percent last year.
Other Apple devices, however, did not perform as well.
The iPad, for instance, took a dip from 26 million units sold in the fourth quarter last year to 21.4 million units this year.
“A bet on Apple is increasingly a bet on the iPhone,” said Toni Sacconaghi, a financial analyst for Sanford C. Bernstein & Company, according to the Times. “The good news is, iPhones are great. The bad news is, right now that’s driving over 100 percent of the revenue growth of the company.”
(With reports from CNN, Reuters, SF Gate and The New York Times)
