iFortune

AS A business that makes a lot of extremely popular smartphones, Apple has become used to generating telephone-number size profits too. But the world’s largest company by market capitalisation has just delivered a record-breaking set of results that took even seasoned telecoms analysts by surprise. In the three months to December 27th 2014, which is the first quarter of its fiscal year, it made a whopping $18 billion profit, 37% higher than the same period of its previous fiscal year, and the largest quarterly profit ever reported by a public company. Its revenue soared 30%, to $75 billion.

The key to its success is the iPhone, which now accounts for some two-thirds of Apple’s revenue. The firm’s latest earnings numbers reflect the first full quarter of sales of its new iPhone 6, both models of which boast larger screens than their predecessors. This has propelled Apple into the “phablet” market, making larger devices with fatter margins, and has helped to turbocharge sales. Tim Cook, Apple’s boss (pictured), says the company sold the equivalent of 34,000 iPhones an hour, 24 hours a day, in its latest quarter, bringing the total purchased during the period to 74.5m.

That is a stunning figure. It has brought Apple somewhat closer to dethroning South Korea’s Samsung, which still dominates the smartphone business in terms of number of devices sold. It is also a testimony to the strength of Apple’s “ecosystem”, which combines its slick gadgets and plenty of software apps: the firm’s online app store had its busiest day ever on January 1st, suggesting plenty of Apple gadgets were given as presents over the holiday period. In November, Apple shipped its one billionth iOS device (a category that includes the iPhone, iPad and iPod touch).

Much of the increase in demand for Apple’s products came from outside America. China was especially important to the firm. Its online sales there in the quarter were equal to the total of its previous five years of revenue from Chinese customers. Brazil was another big source of new sales.

Not all of the news was stellar. Sales of Apple’s iPad tablet computer fell year-on-year; Mr Cook said that the firm was studying how to improve its appeal. But that did not dim the enthusiasm of investors, who drove Apple’s share price up more than 6% in after-hours trading. They were particularly happy to hear that the company’s smart watch, its first brand new product for several years, would go on sale in April.

That could further swell the cash pile in Apple’s coffers, which now stands at a mind-boggling $178 billion in spite of Apple’s moves to return some money to shareholders via buybacks. Mr Cook and Luca Maestri, Apple’s chief financial officer, are likely to get more calls now from shareholder activists keen to see the company do something with its Croesus-like hoard of cash. No doubt some of those calls will be placed using shiny new iPhones.