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Technology

Apple logs record quarter as revenue in China jumps nearly 60%

Japan sales also hit all-time high with help from iPhone 12 release

Strong demand for the first 5G iPhone propelled Apple's revenue growth in all regions. (Photo by Rie Ishii) 

PALO ALTO, U.S. -- Apple reported its highest quarterly revenue of all time on Wednesday driven by robust sales of its first 5G iPhones, especially in China.

For the three months ended Dec. 26, Apple's total revenue grew 21% on the year to reach $111.4 billion, a quarterly revenue record and the first time the company booked more than $100 billion in revenue in a single quarter.

Apple's record earnings came mainly from the 17% year-over-year increase in iPhone sales to $65.6 billion. However, the company also saw double-digit percentage growth in all its other product categories, including Macs, iPads, wearables and services, a trend driven by the widespread adoption of working from home and remote learning.

"The products [iPhone 12s] are doing very well all around the world, and you've seen that our performance has been particularly strong in China, where we've seen phenomenal customer response,'' Apple CFO Luca Maestri said during the earnings call on Wednesday.

"There was probably some level of pent up demand for 5G iPhones [in China], given that you know, the market is moving very quickly to 5G," he added.

Greater China saw the highest sales jump in the quarter. The region, which includes mainland China, Hong Kong and Taiwan, reported a 57% year-over-year revenue increase to $21.3 billion in the quarter, up from the $13.6 billion last year.

Apple released four iPhone 12 models in October, about a month later than its usual timeline for launching new phones. The postponement of the launch of the 5G-capable iPhone led to a significant revenue drop in the Greater China region during the September quarter.

Apple CEO Tim Cook said during the call on Wednesday that the company had "some level of anticipation" that the 5G-capable iPhone 12 would perform well in China, as the overwhelming majority of phones being sold in China are 5G phones.

However, "China was more than an iPhone story," Cook added. Sales of iPads, Macs, and wearable all exceeded the company's expectations during the quarter.

"We could not have turned in a performance like we did [in China] with only iPhone," Cook said.

The iPhone giant also has high expectations for the current quarter in China as the Chinese New Year typically fuels more spending on Apple products and services.

"The March quarter is typically the strongest quarter for our services business and for the App Store, because of the Chinese New Year," Maestri said.

The company is also expecting a further boost from the iPhone 12 lineup, as the first 5G iPhones have been on sale for barely three months.

Elsewhere, Japan registered the second-fastest revenue growth among all regions in the December quarter, with a 33% year-over-year increase to $8.3 billion, a new quarterly record for the country.

Despite the record performance, Apple's share price slipped nearly 3% during after-hours trading Wednesday after the company said it will not provide guidance for upcoming quarters, citing uncertainties related to the COVID-19 pandemic.

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