Financially, is this the peak?
Apple was 90 days away from bankruptcy when Steve Jobs rejoined it in 1997, but it now tends to downplay its financial success before quarterly profit announcements so it can surprise investors and analysts.
This quarter's profits were on another scale, though. Sales in the three months to the end of December were up 30 per cent to US$74.6 billion. Those profits of US$18 billion were up 37 per cent.
It was the fastest quarterly growth since March 2012, when Apple was half the size it is now. As Apple's chief financial officer, Luca Maestri, said: "For a company of our size that is not a small feat."
Morgan Stanley analyst Katy Huberty said it was a "quarter for the record books" and increased her share price target from US$126 to US$133, indicating she believes growth will continue.
The shares, which jumped 5 per cent in after-hours trading after Apple's results, closed at US$117 on Friday.
The big challenge now, says the vice-president of research for CCS Insight, Geoff Blaber, is to find the next growth opportunity.
"Western Europe and north America are becoming saturated. To have room for growth, Apple has to rely on taking growth from [Google's] Android operating system based devices," he said. "The big, focus is on China and to a lesser extent India."
Analysts polled by Thomson Reuters expect Apple's revenue in the year to September to grow 22 per cent, but growth to slow to 4 per cent in the following year.
Are there many people left who want an iPhone?
Apple sold a record 74.5 million mobiles in the quarter, 46 per cent more than in the same period a year earlier.
"Demand for iPhone has been staggering, shattering our high expectations," chief executive Tim Cook said.
The phones accounted for two-thirds of Apple's revenue, and were worth more than Microsoft and Google's latest quarterly sales combined.
"Seems like the whole world wants an iPhone," UBS analyst Steven Milunovich wrote in a note to investors.
However, an analyst at Bernstein Research, Toni Sacconaghi, cautions that Apple's growth may be too reliant on the seven-year-old product line.
"A bet on Apple is increasingly a bet on the iPhone," she said. "The good news is, iPhones are great. The bad news is, right now that's driving over 100 per cent of the revenue growth of the company."
How important is China?
Very: iPhone sales are exploding in the country. Apple overtook local producer Xiaomi to become China's biggest smartphone seller in the last quarter.
Chinese sales, which had been weak for Apple until it released the latest bigger-screen phones, were US$16.1 billion, up 70 per cent on last year - when it also did not have a deal giving it access to China Mobile's estimated 760 million subscribers.
Revenue in China is quickly catching up with the amount it collects in the whole of Europe, where sales were US$17.2 billion, up 20 per cent.
"I was there [in China] right after the launch in October, and the excitement around the iPhone 6 and 6 Plus was phenomenal," Cook said.
Apple plans to double the number of stores it has in China to 40 by mid-next year.
Only a year earlier, in October 2013, Apple was the No 6 smartphone maker in China, trailing Xiaomi, Huawei, Lenovo, Samsung and Yulong, according to research firm Canalys.
"This is an amazing result, given that the average selling price of Apple's handsets is nearly double those of its nearest competitors," Canalys said. "While Chinese smartphone vendors are quickly gaining ground internationally, Apple has turned the tables on them in their home market."
Can it afford for the Apple Watch to fail?
It has been five years since Apple launched its last truly new product, the iPad. To live up to its name for innovation, and diversify revenue away from reliance on the iPhone, Apple needs the Apple Watch to be an unqualified success.
Cook said the watch would go on sale in April, giving the company a boost in its third quarter, when it will not benefit from Christmas or the Chinese new year, which will have helped the previous two quarters.
"We're making great progress in the development of it," he said.
Apple describes the new product - often referred to as the iWatch, although it has not been officially named - as the "most personal device ever" and it is thought it will be able to monitor its wearer's health as well as connect to an iPhone to provide several other functions.
Cook said app developers had already impressed him with "some incredible innovation".
Carolina Milanesi at Kantar Worldpanel ComTech said the watch would help Apple extend its sales into a much wider market.
"It has been very smart in pushing it as jewellery and design rather than how technologically smart it is," she said.
"It is concentrating more on impressing the design and fashion world than the tech bloggers.
"I think this will be a much more irrational buy than with an iPad. With an iPad you wanted an iPad; this is going to be more of a fashion statement."
She said the launch would benefit from the fashion and marketing skills of former Burberry boss Angela Ahrendts, who Apple hired last year on a US$73 million pay package as its head of retail.
Apple poached a string of big names from fashion and design to join its watch team, including Patrick Pruniaux, former vice-president of sales at Tag Heuer and former Yves Saint Laurent boss Paul Deneve.
Has Tim Cook emerged from the shadow of Steve Jobs?
Few chief executives were as intimately connected to their companies as Jobs was with Apple, and Cook faced a tough battle to win over investors worried he lacked the co-founder's vision and showmanship.
Activist investors David Einhorn and Carl Icahn tried to interfere with Cook's management, but he stood his ground.
He's also shown his steely side by axing the former head of its iOS mobile operating system, Scott Forstall, over the failed launch of the Apple Maps app, as well as replacing the head of the company's stores, John Browett, after he'd been less than a year in the job.
Jobs and Cook are "such different personalities", said Milanesi.
"The reception under Cook has been very positive. He is very impressive in operations and managing the product chain."
Cook had also done a lot to make Apple a more approachable brand.
"With Jobs it was aspirational but somewhat untouchable and distant," she said. "It seems much more open and accessible under Tim, and that's important as it wants to extend the product range to a wide section of consumers."
Will Apple's huge cash pile become a liability?
Apple is making much more money than it can spend, to the extent that it has built up a US$178 billion cash pile.
It added US$23 billion to the coffers in the last quarter and nearly all of it is banked overseas - because bringing it back to the US to return it to shareholders would incur a big tax bill.
To appease investors Apple has been buying back shares, but by borrowing against the cash rather than using the capital.
It bought back US$45 billion of shares last year but hasn't made much of a dent in the cash pile. It has US$35 billion of debt.
Blaber said Apple had to maintain a large surplus to give it "the muscle and flexibility to invest in new categories".
But its latest and biggest acquisition - Dr Dre's headphones and streaming business Beats Electronics - cost it US$3 billion.
The size of Apple's cash holding has attracted politicians' attention.
Cook has told Congress the company will eventually bring it back to the US, but only when there is a "dramatic simplification of the corporate tax code" including a "reasonable tax on foreign earnings that allows the free flow of capital back to the US".
- Observer
