April 24, 2014, 2:32 PM — As usual, Apple CEO Tim Cook was the focus of attention during the company'squarterly earnings call with analysts on Wednesday. And, as usual, we've got a transcript of his remarks while on the call.
The iPhone was key in driving our stronger-than-expected results. We sold almost 44 million iPhones, setting a new March-quarter record. These strong results were broad-based, both from a product point of view, with demand for each of our three iPhones stronger than its predecessor, and from a geographic standpoint. We gained smartphone share in many developed and emerging markets including the U.S., the U.K., Japan, Canada, Germany, France, Vietnam, and greater China, just to mention a few.
iTunes software and services revenue continued to grow at a double-digit rate, thanks to an incredible ecosystem and our very large, loyal, and engaged customer base. With strong momentum and growing profitability, iTunes is a very important driver of our business, not only here in the United States, but around the world. We now have an almost 800 million iTunes accounts, most of these with credit cards. This is a staggering number.
We continued to gain share in the personal computer market as well. We defied industry trends again by growing while the market contracted. Our bold decision to make OS X free has resulted in the largest-ever percentage of the Mac install base running on the latest version of the operating system, just months after its release.
iPad sales came in at the high end of our expectations, but we realized they were below analyst estimates, and I would like to proactively address why we think there was a difference.
We believe almost all of the difference can be explained by two factors: First, in the March quarter last year, we significantly increased iPad channel inventory, while this year, we significantly reduced it. We will go into more detail about this later.
Second, we ended the December quarter last year with a substantial backlog of iPad minis that were subsequently shipped in the March quarter, whereas we ended the December quarter this year near supply-demand balance.
We continue to believe that the tablet market will surpass the PC market in size within the next few years, and we believe that Apple will be a major beneficiary of this trend.
We are continuing to invest in our retail stores, and since our last call, we've opened our first stores in Brazil and Turkey, and we now have retail stores in 15 countries around the world.
And I'm looking forward to welcoming our new retail and online leader, Angela Ahrendts, who will be joining Apple's executive team next week.