As usual, Apple CEO Tim Cook was the focus of attention during the company's quarterly earnings call with analysts on Monday. And, as usual, we've got a collection of some his choicer quotes from the call.
We've been selling with China Mobile now for about a week, and last week was the best week for activations that we've ever had in China. So it's been an incredible start. At this moment, we're selling in just 16 cities with China Mobile...this number is projected to be over 300 cities by the end of the year.
So we've got quite the ramp in front of us, and we're incredibly excited. This comes after a new high watermark in China for us last quarter: We grew revenues, including our retail stores, at 31 percent. And we had some very, very strong sales on iPads. iPads in greater China were up 64 percent year-over-year, Macs were up 28 percent; this compares to a tablet market in China that's growing at 21 percent per IDC, and a PC market that is contracting by 7 percent.
And so, in addition to the great iPhone news with China Mobile and how we're looking there, we really, we really turned in a stellar quarter in Greater China overall, and we're very proud of it.
On lowering the cost of iPhone components
You can see that we've projected in the guidance gross margins between 37 and 38 percent. That's despite going from a holiday quarter to a non-holiday quarter, we lose quite a bit of leverage from doing that. And so one of the primary things that's going on there is cost.
On Touch ID and mobile payments
In general, we're seeing that people love being able to buy content — whether it's music or movies or books — from their iPhone using Touch ID. It's incredibly simple and easy and elegant and it's clear that there's a lot of opportunity there.
The mobile payments area in general is one that we've been intrigued with — that was one of the thoughts behind Touch ID — but we're not limiting ourselves just to that. So I don't have anything specific to announce today. But you can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it's a big opportunity on the platform.
On iPhone growth and Mac growth versus the rest of the market
As I've said before, our objective has always been to make the best, not the most. And we feel we're doing that. If you look at what we did this year, we announced two iPhones for the first time, rather than one. And looking at last quarter, if you looked at our sell-through of what I'll just call our entry phone, our mid phone, and our top phone (the 5s), all of those grew year-over-year versus the phones that were in those categories previously.
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