The following is a transcript of Tim Cooks opening statement during Apple's Financial Conference held yesterday followed by a select set of questions posed to Cook from 7 analysts. 

Apple's CEO Tim Cook: Opening Statement

Good afternoon, everyone, and thanks for joining the call. Before I talk about our results, I'd like to take a moment to acknowledge the devastating wildfires that impacted the Los Angeles area this month. From our retail teams to Apple TV+, Apple Music, Fitness+, Beats, and more, L.A. is home to many of our team members. Our thoughts are with everyone who is beginning the road to recovery. For our part, we are contributing to the relief efforts, and we will continue to support our teams and the local community. Now, turning to the quarter.

Today, Apple is reporting revenue of $124.3 billion for the December quarter, up 4% from a year ago and an all-time record. EPS also set an all-time record of $2.40, 10% higher year over year. We achieved all-time revenue records across the majority of the countries and regions we track, including the Americas, Europe, Japan, and the rest of Asia Pacific. We also continue to see momentum in emerging markets, setting all-time revenue records in a number of markets, including Latin America, the Middle East, and South Asia, among others.

In services, we achieved an all-time revenue record. And in the past year, we've seen nearly $100 billion in revenue from our services business. I'm also pleased to announce that we reached a new record for our install base with over 2.35 billion active devices.

In October, we released the first set of Apple Intelligence features in U.S. English for iPhone, iPad, and Mac, and we rolled out more features and expanded to more countries in December. Now, users can discover the benefits of these new features in the things they do every day. They can use Writing Tools to help find just the right words, create fun and unique images with Image Playground and Genmoji, handle daily tasks and seek out information with a more natural and conversational Siri, create movies of their memories with a simple prompt, and touch up their photos with Clean Up. We introduce visual intelligence with camera control to help users instantly learn about their surroundings.

Users can also seamlessly access ChatGPT across iOS, iPadOS, and macOS. And we were excited to recently begin our international expansion with Apple Intelligence now available in Australia, Canada, New Zealand, South Africa, and the U.K. We're working hard to take Apple Intelligence even further. In April, we're bringing Apple Intelligence to more languages, including French, German, Italian, Portuguese, Spanish, Japanese, Korean, and simplified Chinese, as well as localized English to Singapore and India.

And we'll continue to roll out more features in the future, including an even more capable Siri. Apple Intelligence builds on years of innovations we've made across hardware and software to transform how users experience our products. Apple Intelligence also empowers users by delivering personal context that's relevant to them. And importantly, Apple Intelligence is a breakthrough for privacy and AI with innovations like private cloud compute, which extends the industry-leading security and privacy of Apple devices into the cloud.

Apple Intelligence opens up an exciting new frontier and is already elevating experiences across iPhone, iPad, and Mac. We're going to keep investing in innovation and in transformative tools that help users in their everyday lives. Let me now turn to our results for the quarter, starting with iPhone. iPhone revenue came in at $69.1 billion, reaching all-time iPhone revenue records in dozens of markets and regions.

Our iPhone 16 lineup takes the smartphone experience to the next level in so many ways, and Apple intelligence is one of many reasons why customers are excited. With the A18 powered iPhone 16 and iPhone 16 Plus, users are getting a big boost in battery life and incredible camera experiences with camera control. Our amazingly powerful iPhone 16 Pro models go even further with larger-than-ever displays and a pro camera system so advanced, it can turn moments into masterpieces. In Mac, revenue was $9 billion for the December quarter, 16% higher year over year, driven by significant excitement around the world for our latest Mac lineup.

The Mac is more than just a powerful tool. It's a launch pad to enable users to bring their best ideas and boldest creations to life. And there are so many reasons to choose Mac, from the breathtaking performance of the M4 family of chips, to the groundbreaking and growing capabilities of Apple Intelligence. Every product in the Mac lineup offers something extraordinary, whether that's the super-portable MacBook Air, the powerhouse MacBook Pro, the world's best all-in-one iMac, or the small wonder that is the Mac Mini, which is not only stunningly capable but is our first carbon-neutral Mac.

All of this is enabled by the unparalleled power of Apple silicon. iPad revenue was $8.1 billion, up 15% from a year ago, driven by strong interest for our latest products. We love hearing from customers who are discovering for the first time the versatility of iPad, from the ultra portable iPad Mini built from the ground up for Apple intelligence, to the powerful M4 iPad Pro in a stunningly thin and light design. iPad is there for our users whenever they need it and wherever they go, and we are pleased to see so much excitement and enthusiasm for our lineup.

Wearables, home, and accessories revenue came in at $11.7 billion. With its most advanced display yet and a thinner, more comfortable design, the all-new Apple Watch Series 10 is the perfect companion to help users pursue their health and fitness goals this year. From the powerful Vitals app to more customizable activity rings, users have an ever-increasing set of innovative health tools at their fingertips in watchOS 11. Health innovation has long been a focus for us, and we're committed to continuing to advance this work because we know how much it matters to our users.

We've introduced new hearing health features on AirPods Pro 2. And new sleep apnea notifications on Apple Watch are also helping users learn of a potentially serious condition that's thought to affect up to a billion people worldwide. During the quarter, we also brought Apple Vision Pro to even more countries, enabling more customers to discover the magic of spatial computing. Users are enjoying incredible immersive entertainment experiences and powerful new features and enhancements to Mac virtual display.

Vision Pro is also supercharging the creative process, and the incredibly talented director, Jon M. Chu, recently shared how its extraordinary capabilities helped him bring the movie "Wicked" to life. Turning to services, we set an all-time revenue record of $26.3 billion for the December quarter, growing 14% from a year ago. We set all-time records in the Americas, Europe, and rest of Asia Pacific, and a December quarter record in Japan.

Five years since launch, Apple TV+ continues to be home to incredible storytelling that viewers love. There's nothing quite like the anticipation that comes when a fan favorite returns, and we were thrilled to debut the second season of "Severance" earlier this month. We have so much in store for our subscribers this year with new shows like "The Studio" and "Your Friends and Neighbors." And we can't wait for the premiere of "Formula 1" starring Brad Pitt on June 27th, which will take viewers inside the sport in a truly unprecedented way. We're excited that Apple TV Plus continues to draw attention and accolades.

Today, Apple TV+ productions have earned more than 2,500 nominations and 538 wins. During the quarter, we were also excited to launch a new Find My service that can help our users when they lose their luggage. For the first time, if you put an AirTag in your suitcase, you'll be able to share its location information with many major airlines so they can quickly track down your bags if they get lost. Turning to retail, our teams went above and beyond to help customers find the perfect gift throughout the holiday season.

We also celebrated openings of new stores in China, Spain, and the U.S. And we were excited to announce plans to connect with even more customers this year by adding a fifth store in the UAE and bringing our online store to Saudi Arabia this summer. We can't wait to welcome customers to the first of several flagship store locations in Saudi Arabia that were opening beginning in 2026. I just had the chance to visit both countries last month, and I had a great time meeting with customers and team members.

There's an incredible energy and passion for technology in these growing markets. Every day, I get deeply moving notes about the many ways our technology is enriching our users' lives. I recently got a note from a customer who put his watch on his father's wrist when he feared something was wrong with him. The watch alerted them that the father was in AFib and they were able to get him to the hospital for potentially life-saving treatment.

Another user put his new watch on for the first time and within 15 minutes was notified of a low heart rate that led to a necessary pacemaker. And there are so many touching notes around the profound impact of our new hearing health feature, like a recent user who told me it had changed her life, allowing her to take part in conversations with her children and grandchildren. These are the kind of stories that remind us of how profoundly important our work is, and it drives us to innovate each and every day. At Apple, the future is full of promise and potential.

We're always searching across a world of possibilities, finding those places where we can do the most good and putting all of our energy and ingenuity into making something special. With that, I'll turn it over to Kevan.

Tim Cook In the Q&A Segment (7 Select Analysts Questions listed)

Erik Woodring -- Analyst

In your prepared remarks, you had noted that iPhone 16 models are selling better in markets where Apple Intelligence is available. And I'm just wondering if you could double-click on that comment a bit and share any other details you believe could, you know, better help us understand how Apple Intelligence is really impacting iPhone demand and/or what features you find that users are using most often already.

Tim Cook

Yeah, Erik. Hi, it's Tim. The -- we did see that the markets where we had rolled out Apple Intelligence that the year over year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available. In terms of the features that people are using, they're using all of the ones that I'd referenced in my opening comments, from Writing Tools to Image Playground and Genmoji, to visual intelligence and more.

And so, we see all of those being used. The Clean Up is another one that is popular, and people love seeing that when demoed in the stores as well. We only had two, two and a half weeks or so during the December quarter of the second release of 18.2. And then, only had the U.K.

and the other English language countries for the two and a half weeks. And so, we've got, you know, just the early indications at the moment. But we were glad

Erik Woodring – Question 2

If we set aside China macro, which I understand is still challenging, can you maybe talk about the headwinds that Apple faces, whether that's, you know, shifting preferences for Western technology brands in favor of domestic vendors, or is this just a function of not necessarily having Apple Intelligence available with the iPhone 16, which is, you know, not necessarily helping replacement cycles? Just maybe double-clicking on what you think and what you're hearing in China as a regard -- as it relates to the iPhone. Thanks so much.

Tim Cook

Yeah, sure. If you look at our greater China revenue for the quarter, we were down 11% year over year. And over half of the decline that we experienced was driven by change in channel inventory from the beginning to the end of the quarter. And, of course, on the Apple Intelligence side, we have not rolled out in China.

And as we just talked about, we did see better results in the markets that we had rolled out in than markets we hadn't rolled out in. And, of course, it's the most competitive market in the world. And so, all of those things are true. In terms of the macro situation, there was a fiscal stimulus or subsidy announced in -- very recently in January that did not affect the December quarter.

There were some provincial subsidies in the December quarter, but the national program was announced, I believe, on January 20th. And it does cover the categories that we have products in from smartphones to tablets and PCs and smartwatches up to a certain maximum price point. And so, we do see fiscal stimulus occurring, and we'll be glad to talk about what that looks like on the next call.

Ben Reitzes – Analyst

You obviously don't talk about new products and stuff like that, but do you feel that there's a lot of room for form factor innovation in the future? Or do you feel that the -- you know, that the current lineup kind of shows where you're going? I guess, without pulling punches, wondering if you thought, in terms of the phone innovation, if there's a lot more to come and you could see the kind of current market changing a bit over the next two to three years.

Tim Cook

Ben, I think there's a lot more to come, and I could not feel more optimistic about our product pipeline. So, I think there's a lot of innovation left on the smartphone.

Mike Ng -- Goldman Sachs – Analyst

it was encouraging to hear about the record for iPhone operators, which I think is something you haven't said for about a year now.

I was wondering if you could talk a little bit about what you would attribute this upgrade strength to. Has Apple Intelligence played a role in helping upgrades in the markets that you've launched in? 

Tim Cook

If you look at iPhone, we did set an all-time record for upgraders, so we've never seen a higher level of upgraders before. The install base hit a new all-time high as well. And if you look at the 16 compared to the 15 from launch, which occurred, as you know, in September, so this is across now two quarters from September to the end of the December fiscal quarter, the 16 outperformed the 15.

And so, I think you can conclude from that that there are compelling reasons to upgrade. And in the markets where we had launched Apple Intelligence, they outperformed the markets that we did not. So, lots --

Mike Ng -- Goldman Sachs -- Analyst

I had [a question] about the iPad Pro and for the thinner version. I was just wondering if you could talk about that thin form factor for the iPad Pro.

You know, how did it help iPad sales overall? And what did your kind of marketing consumer research tell you about how consumers valued that thin product form factor? Thank you.

Tim Cook

It's a good question. iPad overall grew 15% for the quarter. And it was more driven by iPad Air and the entry-level iPad than it was the top-level iPad. But overall, we could not be more pleased with the iPad category growing 15%.

It's a great achievement for the quarter. And probably, what is most important is that over half of the sales in the December quarter went to customers who were new to the iPad. So, that tells us that, you know, there's a good amount of customers there to attract.

Amit Daryanani -- Analyst

Good afternoon everyone. I have two as well. Maybe to start with, you folks are seeing some very robust growth trends in emerging markets right now for Apple products. Can you just at a high level just talk about the durability of growth that you see in emerging markets? And then, do you think the summation of these emerging markets are starting to get big enough or, perhaps, starting to grow fast enough that it can actually offset some of the China headwinds you're going through?

Tim Cook

We have great results in a number of emerging markets. And as you know, from past calls, I'm particularly keen on India. India set a December quarter record during the quarter. And we're opening more stores there.

We've announced that we're going to open four new stores there. We also -- the iPhone was the top-selling model in India for the quarter. And it's the second largest smartphone market in the world and the third largest for PCs and tablets, and so there's a huge market. And we have very modest share in these markets, and so I think there's lots of upside there. And that's just one of the emerging markets.

Samik Chatterjee -- Analyst

You had a great quarter on Macs and iPads, both. And I'm just curious in terms of if you can help us think about the sustainability of this double-digit growth that you saw in both the product lines.

And more interest also here, we are talking about Apple Intelligence sort of influencing volumes on iPhones, but any thoughts on sort of how -- what does that influence look like in terms of volumes for Macs, for example, where, I think, there's a lot of conversation around AI PCs, how you're thinking about the impact there? And I have a quick follow-up. Thank you.

Tim Cook

If you look at Mac, Mac was up 16%. And on iPad, we were up 15%. The Mac was driven by a very strong uptake on our new products during the quarter and the continued success of the MacBook Air.

And so, as you know, we've launched an M4-based MacBook Pro, an iMac, and a Mac Mini during the quarter. We believe we've got the best AI PC out there for running workloads. The silicon in the Mac is, and it has been for several years now, designed by us and really designed for these workloads. And so, I don't want to project at the category level for the future, but we're incredibly pleased with both the Mac and the iPad for the quarter.

Richard Kramer -- Arete Research -- Analyst

Thanks very much. My first question is for Tim. I'd like to ask about what might accelerate the pace of Apple Intelligence adoption. I guess, do you see this simply as a question of time, i.e., to launch more markets and languages, or increase the percentage of install base devices that can support it? Or is it a question of money, i.e., shifting R&D or marketing spend toward AI.

And based on other prior Apple services, do you expect a sort of tipping point where adoption will go mainstream? Thanks.

Tim Cook

I do believe it will go mainstream. I'm getting feedback from people using different features today. And this is -- keep in mind that on the iPhone side of our business, you either have to have an iPhone 15 Pro or iPhone 16 to use Apple Intelligence. And so, as that base grows, I think the usage will continue to grow.

And I think -- I know from my own personal experience, once you start using the features, you can't imagine not using them anymore. I know I get hundreds of emails a day, and the summarization function is so important. So, I think it's a combination of that. And, of course, in April we roll out a whole series of new languages that we had mentioned, and so the base grows further.