[On iPhone backlogs and ensuring sufficient supply.]
As I mentioned on last quarter's call, we made a very bold bet on taking iPhone capacity for the September quarter, with the new iPhone 4 in the line-up, to 14 million. And as you may remember, we sold over 14 million in total iPhones. It was a fantastic quarter. And that was up from a previous number that was in the eight-ish range. We were able to step that up in this past quarter to over 16 million. And so we were able to increase over two million. And we obviously have continued to work on increasing this further. But as with all good things, it takes some time to do that.
Relative to Verizon, we are thrilled to offer the iPhone 4 to Verizon's 93 million customers as well as any new customers who want an iPhone 4 on Verizon. And we're going to do anything possible to get the iPhones into as many hand of those customers as possible.
[How comfortable are you with the availability of iPhones and iPads, and do you still see shortages?]
On iPad, we increased dramatically last quarter. We sold 7.3 [million], the previous quarter we were in the low fours, as you know. That did get us in supply/demand balance and also allowed us to expand to a total of 46 countries, which added 20 during the quarter. And we're confident enough to add another 15 countries during the month of January, which will take us over 60. So we feel very, very good about the progress that we've made here.
Relative to iPhone 4, I also feel very, very good about what we've been able to do--however, it's not enough. We do still have a significant backlog. We are working around the clock to build more. I feel great that the demand is so high, but at this point I'm not going to predict when supply and demand will meet. We believe the reaction and results from the Verizon customers will be huge. And so I don't want to give a prediction right now on when supply and demand will cross.
[Sequential growth in Asia-Pacific is impressive. What's driving that?]
Of the BRIC countries (Brazil, Russia, India, China), we several years ago identified China as our top priority and we put enormous energy into China, and the results of that have been absolutely staggering. To give you some numbers there... (And we look at Greater China as a region: Mainland China, Hong Kong, and Taiwan.) The revenue from Greater China for Apple for last quarter was $2.6 billion, which was up 4x from the prior-year quarter. And to further, just an exclamation point beside that, we did a little over $3 billion for the entire year of fiscal year '10. So we're very proud of the team and the results that we've gotten there.
Korea has also been a very, very good market for us. We had an outstanding Q1 there, primarily driven by iPhone and iPad. And there are several other Asian countries doing extremely well. Japan is not in the segment that you're looking at, but Japan by itself, the revenue was up 83 percent year over year. And you're familiar with the Japanese economy and the growth there, to grow 83 percent on the base that we're doing, is stunning. And so we are placing more and more resource in these areas and continue to look for expansion possibilities throughout Asia.
[I was wondering if there's any insight you can give us in terms of what your long-term business plan is, in terms of product roadmap.]
Well, you know, that's all part of the magic of Apple. And I don't want to let anybody know our magic, because I don't want anybody copying it. What I would tell you is that in my view, Apple is doing its best work ever. That we are all very happy with product pipeline, and the team here has an unparalleled breadth and depth of talent and a culture of innovation that Steve has driven in the company, and excellence has become a habit. And so we feel very, very confident about the future of the company.
I would also note, for those people who haven't thought about it, we've done outstanding in our Mac business. We've had 19 quarters straight of growing faster than the market. But we still have a relatively low share of a very large PC market, despite having great momentum there. And so it would seem like there is enormous opportunity still there.
We have relatively low share in the handset market. The handset market is well over a billion units a year, and the smartphone market is growing faster than a weed. And so there's enormous opportunity here, and we have incredible momentum in that space.
iPad just got started, it's a new category, we sold almost 15 million through the first three quarters, and we believe the market is huge. IDC, I saw this morning, is predicting it to quadruple in two years. I don't know what to predict in terms of specific numbers. However, we believe it's a huge market, as we've said before. And so we're in some great markets, some fast-moving markets, we have the best products we've ever done, and an incredible product pipeline. We feel very, very confident.
[Which component areas are you making long-term commitments in?]
It's something I don't want to give out, because I view it as a competitive... something I just don't want our competition knowing. But let me talk about it in general, and hopefully that will suffice. From our point of view, on the design side, we design components where we believe we can innovate beyond what's available in the market. The most recent example of this is the A4 chip. But with the A4 chip, we didn't feel like we had to invest in the fab itself and build a fab, because we felt like there were good options in the market for doing that, but not good options in terms of buying a design, so we really focused on design.
On the operational side of the house, as you probably remember, we've historically entered into certain agreements with different people to secure supply and other benefits. The largest one in the recent past has been, we signed a deal with several flash [memory] suppliers back in the end of 2005 that totaled over a billion dollars, because we anticipated that flash would become increasingly important across our entire product line and increasingly important to the industry. And so we wanted to secure supply for our company. We think that was an absolutely fantastic use of Apple's cash, and we constantly look for more of these. And so in the past several quarters, we've identified another area and come to some recent agreements that Peter talked about in his opening comments. These payments consist of both pre-payments and capital for process equipment and tooling. And similar to the flash agreement, they're focused in an area that we feel is very strategic. And so I'd prefer not to go into more detail about what specific area it's in, but it's the same kind of thinking that led us to those deals.
[Can you comment on how you're currently viewing the competitive tablet landscape?]
If you look at what's shipping today, there's not much out there, as you know. Generally speaking, there's two kind of groups that are on the market today. The ones that are using Windows-based operating system are generally fairly big and heavy and expensive, they have very weak battery life, they require a keyboard or a stylus as an input device. And from our point of view and what we've seen, customers are frankly not interested in them.
Then you have the Android tablets, and the variety that are out shipping today, the operating system wasn't really designed for a tablet, and Google has said this. This is not just an Apple view by any means. And so you wind up having a size of tablet that is less than what we believe is reasonable or even one that would provide what we feel is a "real tablet experience." So basically you wind up with a scaled-up smartphone, which is a bizarre product, in our view.
So those are the two that are shipping today, and frankly speaking, it's hard for me to understand, if somebody does a side-by-side with an iPad, I think some enormous percentage of people are going to select an iPad there. Those are not tablets that we have any concern on.
The next-generation Android tablets, which are primarily what you mentioned in terms of CES, there's nothing shipping yet, and so I don't know. Generally they lack performance specs, they lack prices, they lack timing, so today they're vapor. We'll assess them as they come out, however, we're not sitting still. And we have a huge first-mover advantage. And we have an incredible user experience, from iTunes to the App Store, and an enormous number of apps, and a huge ecosystem. And so we're very, very confident with entering into a fight with anyone.
[What might change in terms of iPhone exclusivity and movement to other carriers, worldwide?]
We're always looking and assessing in every country who we should be doing business with and exploring different deals and arrangements, etc. And so, we'll continue to do that. What I've said before, and we have seen this in every case literally that we've done, is where we've moved from a exclusive carrier arrangement to a dual- or multi-carrier arrangement, our growth has changed significantly and our market share has increased. That doesn't mean that would happen in every country, nor does it mean that we're just out doing that in every country. We look at each one individually. Each market has its own individual characteristics, and parameters, and technology.
On the CDMA phone specifically, I don't have any specific thing to announce today other than we are truly thrilled to be working with the Verizon team. They have built quite a company, and earned a great deal of respect from their customers, and some of them have waited a long time to get iPhone, and we're very, very happy to give them iPhone. And any other customers, that are non-Verizon customers that wish to buy an iPhone. We're also very happy that we've signed a multi-year non-exclusive deal with AT&T. And so we're very happy that we will have shortly a dual-carrier setup in the U.S.
I've generally found, people really want to do business with us, and their customers very much desire to have the iPhone. I don't really see a lack of desire. I don't want to comment about any specific country, because I view any conversations that we have going as confidential in nature. It is true, as you said, that we are not under a contractual exclusivity now in any country in the world. The last one was the United States. We have moved away from those. I can guarantee you that we always are looking at opportunities to grow. Of course in the very short term, I would also remind you that we're constrained on iPhone 4 and we're working around the clock to get as many of these out to our existing partners as we can.
[What's going on regarding the Mac? And will are iPads cannibalizing Mac sales?]
What we saw on the Mac this quarter, we grew 23 percent at the worldwide level, and that is compared to a market growth of only three [percent]. And so we grew almost either times the market rate of growth, which I think is stunning. And every region outgrew the market, so it wasn't just one region. Asia/Pacific led the growth with a whopping 67 percent year-over-year increase, and that's almost ten times what the market did there, to put it in context. Japan grew at 56 percent, which is about six times the market. And Europe and the United States both grew in double digits, despite both markets contracting overall. And so we did significantly better than the market in every major region. And we're very proud of that.
Now, was there any cannibalization by iPad? Honestly, I don't know for sure, but yes, I think there is some cannibalization. But I also think there is a halo effect. As we've seen on the Mac by the iPod some years ago, I think there is a halo effect from Apple product to Apple product. And of course we have introduced millions of people in Asia to Apple through the iPhone. And we're now introducing many more through the iPad, and I think some of those decide to buy a Mac. And so when you look at the Mac growth in Asia at 67 percent, and you look at the Japan growth at 56 and you look at the U.S. and Europe growing at double digit, against shrinking markets, if this is cannibalization, it feels pretty good.
If the iPad or tablets do cannibalize the PC market, keep in mind that we have low share of the PC market, so the other guys lose a lot more, and we have a lot more to win because of that. Honestly, cannibalization is not something that we are spending one minute on here. The iPad teams are building the best iPad for the future, and the Mac teams are building the best Mac, and I can tell you that both groups believe that they can continue to grow and do great stuff. And I believe that.
[So are the two platforms merging into one?]
Part of the magic of Apple is that there's not high walls between these product groups. They like each other, talk to each other, they're of the same DNA, they want to build the best products in the world. So if one has a great idea, there's not a "not invented here" in the other group. And so one of the key learnings from the iPad was that people love instant on. They really love that. And so the MacBook Air incorporated that. And that's just one simple example, but there are tons of examples throughout all of our products where something started on one and went to a different one. And it's not always in the same direction, either. It can start on the phone and then flow forward, it can start on the iPad and flow, and so on, and so forth.
And so, that's part of the way we run the company. I think Steve said it great when he said, "If the Mac company were a separate company, and the iPad company were a separate company, what would the Mac company build to compete with the iPad? I think the answer is the MacBook Air." And I think that's a phenomenal insight, I think a great way to look at it. It's not that the groups are competing, they're sharing. And coming up with the incredible products that people really want.
[Any other observations about your battle with Android?]
If you look at the iPhone portion, we had record sales on iPhone with 16.2 million units sold in the quarter. Peter [Oppenheimer] said we believe we could've sold more if we had more supply. From the market estimates that we've seen, it suggests we've moved faster than the market. Obviously we're working around the clock on increasing supply. We're continuing to expand countries and carriers. We're getting enormous enterprise traction, with 88 percent of the Fortune 100, which is mind-blowing, I believe. 83 percent of the Fortune 500, 60 percent of the FT 100. So enterprise traction is gaining.
We have the highest customer [satisfaction] ratings in the industry, versus Android or RIM or anyone. We have the largest App Store, with over 300,000 apps. We've now sold over 160 million iOS devices. This is huge. And we fundamentally believe that our integrated approach delivers a far superior customer experience than the fragmented approach. And you can see this in a variety of ways, from fragmentation of a number of app stores out there, that people are going to pull their hair out because they're going to have a variety of updating methodologies, a variety of payment methods, and slightly different derivatives. You can see from surveys that people are doing to see who is on the latest OS, and you'll notice that the iOS is always off the charts on the percentage of people that have the latest version versus the other guys. We are launching with Verizon next month, we believe there's a huge pent-up demand there. And we think that that will help us in the U.S.
The net net is that we think that our integrated approach is much better for the end user because it takes out all the complexity for the end user, instead of making the end user a system integrator themselves. I don't know about you, but I don't know very many people that want to be system integrators as a consumer or somebody in the enterprise. You know, I think that the more iPhones that we can get out there into people's hands, the more people love them and I think we've got a very bright future. I think the same thing about iPad. It's the same set of issues at the end of the day. The difference on iPad is that we've been running three quarters without any significant competition of any type. And I think the customer [satisfaction] ratings on the iPad are also off the charts. I don't know if any of that is new. I doubt that it is. So I think we're in a very good position.