By AppleInsider Staff

Published: 05:00 PM EST (02:00 PM PST)

Apple on Tuesday reported its best quarter in the history of the company, reaching $26.74 billion in revenue with a net quarterly profit of $6 billion. Following the news, Apple executives participated in a conference call with analysts and the press, and notes of interest follow.

Apple crushed estimates with record sales of 16.24 iPhones, 4.13 million Macs, and 7.33 million iPads. The company also sold 19.45 million iPods in the three-month span that included the holiday buying season.

Participating in Tuesday's conference call was Apple Chief Operating Officer Tim Cook, and the company's chief financial officer, Peter Oppenheimer.

Apple's regional business segments

International sales accounted for 62 percent of Apple's revenue in the first quarter of fiscal 2011.

$9.2 billion of Apple's revenue for the quarter came from the Americas, and $3.8 billion from retail. The remainder of the $26.74 billion came from Europe, Japan and Asia Pacific.

Next to America, Europe was the second-largest region, accounting for $7.3 billion in revenue.

BRIC countries: Identified China as their top priority and put an "enormous energy" there. "The results of that have been absolutely staggering."

Viewing Greater China -- mainland China, Hong Kong and Taiwan -- revenue was $2.6 billion. Up 4X from the prior year quarter.

"We did a little over $3 billion for the entire year, in fiscal year 10," Cook said. "We're very proud of the team and the results that we've got there.

Korea is doing well, as is Japan, where revenue was up 83 percent year over year.

Apple's Mac business

Mac sales were a record 4.13 million for the quarter, with portables leading the way, accounting for $3.7 billion in revenue on sales of 2.9 million.

Desktop Macs earned Apple another $1.7 billion for the three-month period, on sales of 1.2 million.

Mac sales almost 8 times IDCs estimate for world average, fueled by strong sales of MacBook Air and MacBook Pro.

On the Mac App Store, Cook: "We are thrilled to have reported over a million (downloads) in a very short amount of time. So we're very happy with the start of it."

"We've done outstanding in our Mac business," 19 quarters straight of growing faster in the market, but still have a "very low share." Still have "enormous opportunity."

iPad cannibalization of the Mac: "Yes, I think there is some cannibalization," Cook said. "But I also think there is a halo effect."

"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."

"If this is cannibalization, it feels pretty good."

Apple still has a low share of the PC market, so cannibalization isn't a concern to them. "The other guys lose a lot more. And we have a lot more to win because of that."

On bringing iPad features to the Mac: MacBook Air got instant-on because people loved the feature in the iPad. Cook says there are "tons of examples" of where something started in one product and flowed to another. There aren't "walls" within Apple.

Cook on the MacBook Air: Got off to an "unbelievable start." Customers love it. "We're really happy with how it's doing." Have been shipping for less than 90 days. "We've just gotten going."

Apple's iPhone business

iPhone sales were a record 16.24 million, amassing $10.5 billion in revenue for Apple during the quarter.

The iPhone grew in sales 86 percent in the December quarter, compared to IDC's estimate of 70 percent.

The average selling price of the iPhone was $625.

88 of the Fortune 100 companies are now deploying iPhone.

Apple continues to have sizable backlog and could have sold more if they could have manufactured them faster

On Verizon, Cook: "We're going to do everything possible to get the iPhone into as many hands of those customers as possible."

"It's not enough:" their efforts to meet demand. "We do still have a significant backlog," Cook said. "We are working around the clock to build more."

Expecting "huge" results from the Verizon launch. Won't make a prediction of when supply and demand will equal.

Oppenheimer: "Demand for iPhones has been incredible, and we would have loved to have made more of them."

Cook: "I don't envision the overall iPhone ASP decreasing" from quarter to quarter, with the launch of the CDMA iPhone.

"We're always 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."

Growth and market share have changed "significantly" in countries where they have moved from a single carrier model to a multi-carrier model.

CDMA iPhone, Cook says: "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 the iPhone."

Also signed a multi-year non-exclusive deal with AT&T. No longer in a contractual exclusivity in any country in the world -- the U.S. was the last one.

Have sold more than 160 million iOS devices to date

"We think that our integrated approach is much better for the end user, because it takes out all of the complexity for the end user, instead of making the end user a systems integrator themselves. I don't know about you, but I don't know many people who want to be systems integrators."

Apple's iPad business

Apple's sales of 7.3 million iPads accounted for $4.6 billion in revenue during the first quarter of fiscal 2011.

iPad demand is strong for consumer, enterprise and education customers.

Over 80 percent of the Fortune 100 are already deploying or piloting iPad.

The iPad has an average selling price of $600.

Supply was increased in the quarter. Channel inventory increased by about 525,000 by the end of the quarter.

iPad, increased dramatically in sales. Cook said they met supply-demand balance and expanded to a total of 46 countries by the end of the quarter. Are adding 15 countries in the month of January to top 60 total.

"We believe the market is huge," for iPad, Cook said. The market is just starting.

"We're into 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."

On margins: Oppenheimer: "We have always aggressively worked to lower our costs." The company has been "quite happy" with their ability to lower margins on the iPad.

On the competition, Cook says "there's not much out there." Right now there are two kinds of groups on the market: ones using a Windows-based operating system ("big," "heavy," "expensive," require a keyboard or stylus, and have "weak battery life"), and ones based on Android ("the operating system wasn't really designed for a tablet").

The next generation of Android tablets: "There's nothing shipping yet, and so I don't know. Generally, they lack performance specs, they lack prices, they lack timing. And 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."

iPad broke into the mainstream in "record time," Cook says, with a short early adopter period.

Apple's iPod business

iPod sales for the quarter were 19.4 million, representing $3.4 billion in revenue. Compared to 21 million in the year-ago quarter.

The iTunes business also exceeded $1.1 billion in revenue.

iPod touch grew 27 percent year over year, and accounted for more than 50 percent of iPods sold.

Apple's retail business

Apple's retail sales accounted for about $3.5 billion in the quarter, nearly doubled -- increased 95 percent from a year before.

Record Mac quarter -- selling 851,000 Macs, an increase of 24 percent.

About half of Macs sold were to customers who never owned a Mac before.

International store volume exceeded U.S. store volume. Stores in China were most trafficked.

Average of 321 stores open in the quarter, average revenue per store of $12 million. 6 new stores opened in the quarter, 323 stores total, with 87 outside the U.S.

Apple's next (Q2 2011) fiscal quarter

Apple has projected revenue of about $22 billion and diluted earnings per share of about $4.90.

Gross margins are expected about 38.5 percent.

Taxes going forward are expected to be about 25.5 percent.

Cook: "In my view, Apple is doing its best work ever. We are all very happy with the product pipeline. The team here has an unparalleled breadth and depth of talent and 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."

Oppenheimer: "Thrilled" to be giving 53 percent earnings growth year over year for its guidance.

Expect Mac and iPod sales to see a sequential decline, typical for a holiday season. With the iPhone they expect a "significant" over year increase, while the iPad is a new market, and they're unsure.