Apple (AAPL 0.49%) reported strong fiscal Q1 results earlier this week, setting a new milestone for quarterly revenue. Sales topped $100 billion for the first time, coming in at a whopping $111.4 billion for the final quarter of 2020. Full-year revenue was nearly $300 billion, and the services segment also hit a new quarterly record of $15.8 billion in revenue.
Here are three takeaways from the conference call with analysts.
1 billion iPhones and counting
In early 2019, Apple said that the global installed base of iPhones had hit 900 million. Investors have been anxiously waiting for an update on that important metric, particularly as CFO Luca Maestri had said at the time that the company would provide updates "on a periodic basis."
That finally came this week, with CEO Tim Cook providing some new information around the installed base:
We hit a new high-water mark for our installed base of active devices, with growth accelerating as we passed 1.65 billion devices worldwide during the December quarter. iPhone grew by 17% year over year, driven by strong demand for the iPhone 12 family, and our active installed base of iPhones is now over 1 billion. The customer response to the new iPhone 12 models' unprecedented innovation, from world-class cameras to the great and growing potential of 5G, has been enthusiastic, even in light of the ongoing COVID-19 impact at retail locations.
That means there are approximately 650 million other devices like Macs and iPads in use, but the iPhone continues to be Apple's dominant product.
Topping 600 million paid subscriptions
About a year ago, Apple set a new target to hit 600 million paid subscriptions by the end of 2020. Growth in paid subscriptions finally started to accelerate in 2020 as the installed base grew and Apple released more first-party services. The company had finished Q3 with 585 million paid subscriptions and had been adding 35 million per quarter, putting it on track to easily achieve its goal -- and it did.
During the December quarter, we added more than 35 million [paid subscriptions] sequentially, and we now have more than 620 million paid subscriptions across the services on our platform, up 140 million from just a year ago. Finally, we continue to improve the breadth and quality of our current services offerings and are adding new services that we think our customers will love.
The company recently launched Apple Fitness+, as well as Apple One bundles that include various services at different price points. Analysts believe there are opportunities for other paid services around podcasting or digital health.
All about 5G
As many expected, the inclusion of 5G cellular connectivity was a major demand driver for the iPhone. China is ahead of most countries in terms of 5G coverage and infrastructure deployment, making the next-generation technology particularly important for that market.
I think you've seen that our performance has been particularly strong in China, where we've seen phenomenal customer response that probably there was also some level of pent-up demand for 5G iPhones given that the market is moving very quickly to 5G. And so as we look ahead into the March quarter, we're very optimistic. We believe we're going to be able to be in supply-demand balance for all the models at some point during the quarter.
Carriers in developed markets like North America and Europe continue to aggressively deploy 5G, but other regions like South Korea already offer strong 5G coverage.