Apple CEO Tim Cook: Mac Just Had Its 'Best Year Ever' As Enterprise Sales Surge

With this fall's blockbuster launch of three new iPhones, including the dramatically redesigned iPhone X, most Apple-related attention is on the company's smartphone line.

But in its most recent quarter, the strongest growth in hardware sales for Apple came from a surprising place: Mac laptops and desktops.

[Related: Apple CEO Tim Cook On The iPhone X Price Tag, Augmented Reality And Concerns About Face ID]

Apple's fiscal fourth quarter, ended Sept. 30, saw the Mac line produce $7.17 billion in revenue for the company. That represented 25 percent growth from the same period a year earlier when sales were $5.74 billion.

The fiscal Q4 results were also the strongest showing for the Mac business since the company's fiscal Q1, when sales of $7.24 billion were buoyed by the introduction of the revamped MacBook Pro.

The Mac "had its best year ever" in fiscal 2017 in terms of revenue, and fiscal Q4 also marked the strongest September quarter ever for Mac sales, Apple CEO Tim Cook said during the quarterly earnings call on Thursday. The sales were "driven by notebook refreshes we launched in June and a strong back-to-school season," Cook said. Mac revenue totaled $25.85 billion for fiscal 2017.

In Q4, the "performance was fueled primarily by great demand for MacBook Pro," Apple Chief Financial Officer Luca Maestri said during the earnings call.

Building on the introduction of the new MacBook Pro in the fall of 2016, Apple followed up in June by updating the MacBook Pro, as well as the MacBook, with Intel's seventh-generation Core processors. Apple also debuted updated iMac models in June.

Cook and Maestri said key factors in the growth of the Mac division included rising demand in China, as well as strong sales in the enterprise and education markets. There has been "great traction for Mac in the enterprise market," with an "all-time record" for enterprise purchases of Mac set during fiscal 2017, Maestri said.

Overall, Apple generated revenue of $52.58 billion during the fiscal fourth quarter, up 12 percent from $46.85 billion a year earlier.

The recent quarter's growth can almost entirely be attributed to the Mac and Services segments, not to the iPhone. During fiscal Q4, the iPhone business generated $28.85 billion in revenue, up 2 percent from $28.16 billion the year before. The quarter included nine days worth of sales of the iPhone 8 and iPhone 8 Plus models.

Services rose 34 percent to $8.5 billion during the quarter for Cupertino, Calif.-based Apple.

Cook said that demand for iPad in enterprise and education markets helped fuel growth there, as well. Apple reported that Q4 sales of iPad reached $4.83 billion, an increase of 14 percent over the $4.26 billion generated by the iPad line a year earlier.

On Friday, Apple will begin shipping for the iPhone X, a redesigned iPhone model with a nearly edge-to-edge OLED display, Face ID facial recognition, and inductive charging capabilities.

During the earnings call, after being asked when iPhone X supply will catch up with the reportedly heavy demand, Cook said he "can't predict at this point when that balance will happen."

On net income, Apple reported results of $10.71 billion during fiscal Q4, for earnings of $2.07 per share. That's up from net income of $9.01 billion a year earlier and earnings of $1.67 per share.

Regarding Mac sales, the strong results follow an about-face from Apple on the Mac lineup. One year ago, the Mac division was seeing significant revenue decline because Apple hadn't refreshed many of its laptops and desktops for years. Apple has since reversed course, with refreshes to almost its entire Mac lineup rolled out over the past year, as well as announcements of the brand-new iMac Pro and a refreshed Mac Pro on the way.

Read more articles on: