Apple posts record quarter as iPhone sales make a comeback

Apple posted what it calls an "all-time record" earnings for the three months ending December.

(CNN) -- It appears iPhone sales really are on the mend.

Apple posted record earnings for the last three months of 2019 on the back of the iPhone's resurgence. Written off as a fading giant whose best days were behind it, iPhone sales proved it still has some gas left in the tank.

With the iPhone 11, Apple returned to basics, producing its cheapest phone in years with a stellar camera and some improvements over the somewhat derided iPhone XR that preceded it. The iPhone 11 was Apple's bestselling smartphone during the last three months of 2019, CEO Tim Cook said on a conference call with investors.

That helped overall iPhone sales grow by nearly 8% to $56 billion in the quarter. It didn't quite hit a record (in the three months ending in December 2017, Apple sold $61 billion worth of iPhones), but it was a robust turnaround for a product that was in a serious slump: IPhone sales had fallen in each of the previous four quarters.

Services: the iPhone hedge Apple didn't need last quarter

Although iPhones still make up the majority of Apple's overall revenue, massive growth in its services and wearables segments of Apple's business also contributed to the successful quarter. Those divisions of the company are widely heralded as the future of the company, because the cell phone market is so saturated that Apple can't expect iPhone sales growth every quarter.

Apple's services segment, which includes Apple TV+, Apple Music, iCloud and Apple Care, among other products, grew 17% to $12.7 billion in the quarter.

The company now has 450 million paid subscriptions across its services platforms. It increased its target for full-year paid subscription numbers to 600 million by the end of 2020, "given the tremendous momentum we're experiencing in services," CFO Luca Maestri said on the call.

The company did not, however, break out subscriber numbers for Apple TV+, which launched in November. Cook added that the service was off to "a rousing start."

Airpods and the Apple Watch were hot holiday items

Sales in the wearables division, which includes Airpods and the Apple Watch, grew 37% in the quarter. Three quarters of the people who bought Apple Watches during the three months bought the product for the first time, Cook said on the call.

"It's still very much selling to new customers at this point," Cook said.

By the (big) numbers

Overall, Apple posted record quarterly revenue of $91.8 billion, up 9% from the same period last year. It earned $22.2 billion in net income, the biggest quarterly profit for any American company in history.

Apple's stock rose as much as 2.7% in after-hours trading Tuesday, after already having closed the day up 2.8%.

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