Apple just posted its official Q1 2016 earnings report and we’ve broken down how that compares to previous quarters. Next up on the schedule is Apple’s quarterly conference call with analysts where CEO Tim Cook and CFO Luca Maestri typically recap the numbers and field questions about Apple’s financial situation.

To recap the big numbers from today’s report, Apple counted $75.9b in revenue, $18.4b in profit, 74.8m iPhones sold, 16.1m iPads sold, and 5.3m Macs sold during the final three months of last year. Apple Watch numbers aren’t broken out at this point and instead included in the Other category with iPods, Apple TVs, and other accessories.

We’ll be tuned in to the call as it plays out, and update this post with up-to-the-minute details while highlighting major updates. The call is scheduled to kick off at 2 pm PT/5 pm ET so stick around.

  • Earnings report is live!
  • You can listen along at home here.
  • 10 minutes to lift off!
  • No joke, I’m noticing a genre change in the conference call hold music: “High Hopes” by Onra featuring Reggie B is currently playing, according to Shazam. Next up: “Silver” by Caribou. I’m noticing a theme.
  • Don’t worry, we’ll get down into the weeds with financial stuff shortly.
  • There’s some throat clearing action going on, call is kicking off now.
  • CEO Tim Cook speaking first, followed by CFO Luca Maestri as expected. Q&A will follow.
  • Tim Cook recapping “strongest financial quarter ever”
  • Cook says iPhone numbers particularly impressive considering global slowing economic growth
  • 2/3 of Apple revenue generated outside of the US, says global currency flux has huge effect
  • Cook says condition in China have been source of concern for investors, says Apple has seen momentum despite turbulent environment with revenue growth, highest ever quarterly iPhone sales and App Store performance, notices softness starting early this month around Hong Kong, but still optimistic in long term expectations, maintaining investment plans in the region
  • Cook says company sees these times as opportunities to invest in India and other emerging markets as well
  • Cook recapping quarter’s launches, over 3600 Apple TV apps to date, best quarter ever for Apple TV sales, Apple Watch distribution reached 12,000 locations across 48 countries
  • Over 5 million contactless payment ready locations in countries where Apple Pay is available, coming to Exxon through Speedpass+ app, Apple Pay usage accelerated with a growth rate 10x during second half of 2015 compared to first half
  • CFO Luca Maestri now talking more in detail about Apple’s services business
  • Apple defines an active device as one that has accessed an Apple service within the past 90 days
  • With 1 billion active devices in use, Luca Maestri says Apple saw 25 year over year growth
  • iPhone grew 76% in India, 18% in China
  • Maestri cites survey data with highest ever purchase intent for iPhone
  • Maestri describes Mac sales decline year over year while beating PC sales, up 27% in China
  • Apple has over 100 MobileFirst IBM apps for iPad, Apple Watch, and iPhone
  • Cisco partnership ongoing, continuing to grow mobility partner program for enterprise
  • Services revenue increased with average amount spent per customer reaching all time high in December quarter
  • Apple Watch saw especially strong results during holiday buying season, but Maestri isn’t sharing numbers
  • Maestri reviewing upcoming quarter outlook, says Apple is providing a wider range for revenue due to volatility in the global market
  • Maestri says the March quarter will face the toughest year over year comparison than other quarters
  • Q&A time!
  • Goldman Sachs: In terms of March quarter guidance, clarify reasons for drop and how big international markets will impact quarter?
  • Maestri: Issues included in the guidance include strong year ago quarter, macro economic environment, commodity-drive markets weaker than a year ago, Apple increasing prices in certain international markets to protect margins but over time impacts demand, shown in guidance
  • Gene Munster: Talk about iPhone Upgrade Program and any high level thoughts on VR
  • Cook: Blown away by Android switchers last quarter, highest level so far, emerging markets including BRIC has opportunities with LTE penetration, Cook says overtime iPhone Upgrade Program will be more meaningful overtime with habit changes but other items more important short term, optimistic long term, Cook doesn’t think VR is niche, calls it “really cool” and “has some interesting applications”
  • Morgan Stanley: How might consumers react from average selling price perspective with cheaper products?
  • Maestri: Could have strong mid-tier, but happy with ASP currently.
  • Siri chime!
  • Maestri says data centers are growing expenditures for Apple with growing install base.
  • Maestri: We’re nearing completion of our new campus in Cupertino.
  • Toni Sacconaghi: Talk about iPhone decline in next quarter.
  • Cook: We are projecting decline, Q2 will be toughest compare because year ago quarter had catch up from Q1, we were heavily supply constrained in year ago Q1, new environment different on macro global economic level, all contributing factors, difficult to sort out how much is due to each factor, Apple doesn’t spend a lot of time predicting regarding the smartphone market, almost half of iPhones sold in China last quarter were to people buying first iPhone, in emerging markets share is much lower and LTE penetration near zero, lots of opportunity around the world for smartphones
  • Maestri pushing details on Apple as a service company heavily during this call.
  • Idea seems to be to draw attention to 1 billion active users on Apple devices and promote the Apple services business as ongoing revenue to existing customers ahead of quarter with iPhone sales decline for various reasons.
  • Cook: We have some great things in the pipeline, and we strongly believe in investing during downturns like the one everyone’s going through. We’re continuing to invest in China, particularly with Apple Stores, new markets like India, other markets like Russia and Brazil where economies are tied to oil.
  • Cook on China again: LTE penetration around end of October in mid-20s, enormous upgrade cycle for people using 3G handsets. Middle class in China less than 50m people in 2010, projected to be 500m by 2020. Provides us a great opportunity to win over some of those customers into our ecosystem. Angela and her team on aggressive rollout plan. 28 stores in China, 40 by summertime of this year. Distribution continuing with China in mind. Remain bullish on China
  • Cook on India: “very exciting” as growth is very good, 3rd largest smartphone market in the world, median age is 27, population is very young, almost half people in India below 25, demographics great consumer brand opportunity for people that want best products, very rapidly expanding country, government there interested in economic reforms that speak to good business environment in the future.
  • Cook on iPhone Upgrade Program: Not about trying to move iPhone customers from carriers to Apple Store, about making it easy to buy the latest iPhone, no idea over time how percentage will vary between carriers and Apple Retail Stores but that’s not our objective
  • Citi: Does Apple need to grow mid-tier business to grow services business?
  • Cook: Our strategy is always to make the best product, for the smartphone market we’re able to provide several different price points for our customers, we also have mid-price point with last year’s model, continue to offer two year’s ago model and don’t see us deviating from that approach. We don’t design to a certain price point.
  • That’s a wrap. An audio version of the call will be available on iTunes later today for two weeks. Until next time…