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Apple's iPhone 12 led to largest revenue and profit in company history

The tech giant says its fiscal first-quarter iPhone sales grew by more than 17% from the previous year, marking a strong start for the iPhone 12.

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Apple's iPhone 12 was expected to be a big hit, with its new design and 5G wireless.

Angela Lang/CNET

Apple's iPhone sales surged to their highest point ever, as eager fans snatched up the company's new iPhone 12 during the holiday shopping season, despite the continued spread of the coronavirus.

The three months of Apple's fiscal first quarter included the launch of its new series of phones, ranging from the $699 iPhone 12 Mini to the $1,099 iPhone 12 Pro Max. They weren't all that was happening, though. The company also expanded its computer lineup with new customized chips similar to the ones that power its iPhones and iPads. And Apple expanded its services with the $10 per month Apple Fitness Plus digital health class offering and its Apple One bundle pricing, offering access to its TV, music and data storage services starting at $15 per month.

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All told, Apple said it notched profits of nearly $28.8 billion, up about 30% from the same period last year.  That translates to $1.68 per share in profit, from $111.4 billion in overall revenue, which itself was up more than 21% from the $91.8 billion reported last year. It was also enough to beat average analyst estimates, which were $1.41 per share in profits, from $103.3 billion in revenue, according to surveys published by Yahoo Finance.

For Apple, that all added up to the largest corporate profits and revenues it's ever had. It also brought Apple revenues above $100 billion for the first time.

"It is not far from any of our minds that this result caps off the most challenging year any of us can remember," Apple CEO Tim Cook said in a call with investors Wednesday. "It is an understatement to say that the challenges it posed to Apple as a business paled in comparison to the challenges it posed to Apple as a community of individuals, to employees, to their families, and to the communities we live in and love to call home."

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Apple's new iPhones, Macs and Apple Watches contributed to the company's best quarter ever.

Andrew Hoyle/CNET

"These results show the central role that our products played in helping our users respond to these challenges," Cook added.

Apple's stock closed regular trading down nearly 1%, to $142.06 per share, and fell nearly another 2% in after-hours trading. The company's shares have risen nearly 10% so far this year.

Apple's growth underscores how much we've all come to rely on tech companies amid the COVID-19 pandemic. As the disease upends billions of lives around the world, forcing many people to quarantine at home, we've turned to computers, smartphones, social networks and collaboration software to help us keep working and learning. 

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Big tech has gotten bigger during the pandemic.

CNET

Earlier Wednesday, Facebook posted a big rise in revenue as earnings topped expectations. Amazon saw "record demand" over the past year, and particularly during the holiday shopping season, as people chose to shop online rather than brave possible infection in stores. Google and its parent company, Alphabet, as well have outperformed even Wall Street's rosy expectations as marketers spend big to get people's attention online. 

And Slack, the business collaboration app, was sold to software giant Salesforce for $28 billion, nearly twice its value before it went public in 2019.

Cook said Apple is working to help its communities recover by creating programs to encourage students to study technology and new developers to make apps. It's also invested money to help promising new startups.

"We are doubly aware that the work ahead of all of us to navigate the end of this pandemic, to restore normal life and prosperity in our neighborhoods and local economies, and to build with a sense of justice is profound and urgent," Cook said.

Hitting new records

Apple didn't just appear to navigate the pandemic, it's become a central answer to it. Each of Apple's businesses grew at double-digit rates, showing how people turned to its entertainment, health and education-focused products throughout the year.

The iPhone in particular showed strong growth, hitting $65.6 billion in sales, up more than 17% from the $56 billion it reported last year. And that's despite some iPhone models still being hard to find since their launch in October.

"We had a record number of device activations during the last week of the quarter," Cook said, adding that Apple counts 1 billion active iPhone users around the globe. And, he said, they're using Apple's services in addition to their devices. "And as COVID-19 kept us apart, we saw the highest volume of FaceTime calls ever this Christmas."

Apple said it should have enough iPhones to meet demand by the end of March.

Though the iPhone was a standout part of Apple's business, each of the company's other divisions reported revenues that rose at least 20%. That included its Mac business, which hit nearly $8.7 billion in sales; iPad, which grew to $8.4 billion; and "wearables, home and accessories" like AirPods and HomePods, which hit nearly $13 billion. 

Apple's services business, which includes the $5 per month Apple TV Plus subscription service and new $10 per month Apple Fitness Plus, rose to more than $15.7 billion.

All that's contributed to Apple's cash pile, which is now more than $195 billion.

Cook acknowledged that Apple's successes stand in contrast to suffering around the rest of the world.

"Entire portions of our lives that we took for granted -- schools for our children, meetings with our colleagues, small businesses that have endured for generations -- have simply disappeared," Cook said. "It will take a societywide effort across the public and private sectors -- as individuals and communities, every one of us -- to ensure that what's ahead of us is not simply the end of a disease, but the beginning of something durable and hopeful."

Read more: Facebook shows growth in fourth quarter but sees challenges ahead