Thanks to record iPhone and iPad sales, Apple's (Nasdaq:AAPL) first quarter results were again a smashing success. For the first quarter of 2012 Apple announced that it had earned $11.6 billion or EPS of $12.30, up roughly 94% from the year ago period. During the quarter, revenue advanced by nearly 60% year over year to about $39 billion. As usual, Apple analysts were caught off guard on the low side again as they were expecting EPS of $10 and revenue of $37 billion, respectively.

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Saved by China

Apple's phenomenal quarter can be explained by one word: China. On the conference call CEO Tim Cook noted that Apple had "an incredible quarter in China.". IPhone sales benefited from a huge building up in demand in China for the iPhone 4s. International sales accounted for roughly two-thirds of Apple's first quarter revenues. Thanks to China, Apple sold over 35 million iPhones in the first quarter, an 88% increase year over year. iPad sales grew by over 150% to nearly 12 million units. The company noted the new iPad sales were "on fire." As if the unbelievable growth in volume wasn't enough, Apple also made more money from each product sold; gross margins grew by 6 percentage points to 47.4% from 41.4% quarter over quarter.

SEE: Surprising Earnings Results

Bad News For Everyone Else

Apple's enormous success in the quarter comes against a full court press from names like Google (Nasdaq:GOOG), Microsoft (Nasdaq:MSFT) and Samsung, who are all aggressively trying to grow market share in the fast growing and hugely profitable smartphone and tablet markets. So far, efforts from the competition are not putting a dent in demand for Apple's products. Google's Android smartphone platform has certainly become the number two player while Research in Motion's (Nasdaq:RIMM) Blackberry smartphone is struggling to survive, at least on the consumer side.

The Bottom Line
The rumor mill is that Apple will release a new iteration of the iPhone later this year. If that happens, then as usual, sales of iPhone 4s may taper off as loyalists wait to own the latest version. Any way you dice it, enthusiasm for Apple's iPhone and iPad continues to grow globally. And right now, Apple's growth rate does not seem to fall prey to the law of large numbers.

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At the time of writing, Sham Gad did not own shares in any of the companies mentioned in this article.

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