Feedback
Business

Forget the Watch: iPhones Are What Make Apple Profits Tick

The iPhone is still the engine behind Apple's phenomenal success. While skeptics question whether the company's future is tied too much to one product, the iPhone's popularity was the reason Apple turned in another blow-out quarterly financial report Monday. Apple sold more than 61 million iPhones in the first three months of this year, accounting for more than two-thirds of its $58 billion in quarterly revenue and the lion's share of its $13.6 billion in profit. As expected, the numbers were down from the previous quarter, when holiday shoppers bought a record 74 million of Apple's new iPhone 6, 6 Plus and older models. But the 61 million was a 40 percent increase over the number of iPhones sold in the first three months of 2014. "We're seeing great results all over the world," Apple chief financial officer Luca Maestri told The Associated Press. Apple said iPhone sales grew nearly 72 percent in China, helped by gift-buying for Chinese New Year. The company sold more iPhones there than in the United States for the first time.

Other products played a much smaller role. Revenue from Mac computers rose 2 percent from a year earlier, while iPad revenue fell 29 percent, continuing a steady decline in tablet sales. Apple didn't report any results for the new Apple Watch, which it began selling this month, after the quarter ended. Analysts estimate about 2 million have sold to date, suggesting early demand is healthy but not of blockbuster proportions.

"We're seeing a higher rate of people switching to iPhone than we've experienced in previous cycles, and we're off to an exciting start to the June quarter with the launch of Apple Watch," Apple CEO Tim Cook said in an earnings release.

Apple also announced an expansion of its effort to return more of its sizable cash war chest to investors. The company said it will raise its quarterly dividend by 11 percent, to 52 cents a share, and has increased a $90 billion stock buyback program to $140 billion. In total, the company said the program will return $200 billion to investors by the end of March 2017.

TODAY anchors try out new Apple Watches 2:03

IN-DEPTH

SOCIAL

— The Associated Press, Reuters and CNBC.com