When it comes to video marketing, the statistics speak for themselves. After watching a video, a whopping 70% of consumers are more likely to be a product. 92% of viewers of videos on a mobile device share the video with others, and 70% of professional marketers assert that video is the most powerful conversion medium. Yes, it’s safe to say if you’re a business you’d be wise to be utilizing videos as part of your marketing strategy.
Given the profitable capabilities of video, there are innumerable tools available to help business create effective and quality videos. Small Business Trends takes a look at some of the best tools to create animated videos for business.
Create Animated Videos for Business
PowToon
PowToon is an easy-to-use animated video tool that enables businesses to make professional videos in just minutes. Users can make striking videos using PowToon’s simple drag-and-drop system. PowToon’s colourful and eye-catching animated designs can be customized and tailored to a business’s individual needs. Powtoon offers a three-tier pricing structure, one of which is free.
Animaker
Animaker is a do-it-yourself tool for creating video infographics that is based in the cloud. It enables users to show data and statistics in a compelling way, crafting a memorable animated story. With drag and drop functions, pre-animated assets, sound effects, music and in-built data assets, businesses can create videos quickly and creatively. Animaker videos can be no more than two minutes in length. Businesses can try Animaker for free and then have the choice of three monthly payment options.
Animatron
Animatron allows businesses to master the art of animation, quickly and professionally. The company offers two platforms – Animatron Studio, for creating effective explainer videos, html5 animations and banners, and Animatron Wave, for social video creation designed for sharing across multiple platforms.
Talking to Small Business Trends, Animatron’s CEO, Kate Skavish, described Animatron as an: “Easy-to-use and powerful online animated video maker which enables our users to create stunning animations and videos right in the browser.”
Moovly
Moovly provides a tool to help businesses produce creative animated videos designed to engage employees and win clients. Moovly users can enjoy unlimited downloads and unlimited videos. The easy-to-use customizable video software allows businesses to create video presentations, visual reports, explainer and help videos, and internal communication, easily and creatively. Moovly’s pricing structure ranges from a basic subscription of $5 a month to a Moovly Business subscription that costs $300 a year.
GoAnimate
GoAnimate is an effective tool for helping businesses make professional animated videos. Without any set up required, businesses can start making a video straight away. This do-it-yourself tool requires no large team or budget, meaning businesses can create compelling video content on a low budget. Subscriptions to GoAnimate include unlimited creation, hosting and download. Businesses of virtually any secotr can engage their audiences by choosing from GoAnimate’s editable scenes that represent hundreds of industries and occupations. GoAnimate offers a three-tiered pricing structure, ranging from $39 a month or $159 a month for the GoTeam option.
Renderforest
Renderforest is an animated video maker that creates slideshows, logo animations and explainer business videos. The platform is completely free to use and users can produce and export an unlimited amount of high quality videos designed to promote a business and its products in a professional and engaging way. Renderforest provides hundreds of templates that can be customized, enabling companies to create presentations, promotional videos, event invitations, testimonials and more, quickly and efficiently without having to spend any money.
Windows Movie Maker
Windows Movie Maker is a well-established video editing platform, which provides businesses with the essential tools for making videos. With an easy-to-use interface, Windows Movie Maker helps users edit videos, add text and post on a social media channel or onto a website. Businesses can also add background music, effects, timeline narrations and perform transitions with the Windows Movie Maker. The application is free to download.
Prezi
Prezi provides presentation software, which utilizes zoom, motion and spatial relationships to help individuals make inspiring presentations. In 2012, Prezi unveiled a host of creative presentation effects, including 3D and fading animations tools, designed to help professionals make even more stimulating and exciting presentations, through increased visual appeal. In 2017, they released a new version called Prezi Next. Prezi has a three-structured pricing plan, including Standard, Plus and Premium.
Google Web Designer
Google Web Designer is a free tool that produces engaging and interactive HTML5-based designs and motion graphics to run on any device. In 2014 Google announced an update to its Google Web Designer HTML5 tool, which enabled greater options to create animated and interactive content. No coding is necessary when using Google Web Designer.
Explee
The Explee application allows users to make powerful animated videos designed to captivate audiences in a concise and engaging way. This cloud-based app can be utilized from laptops, smartphones and tablets, meaning video creators will have access to the latest version of their videos whilst on the go. Businesses can create animated presentations with their team, invite members to join the workspace and custom their video library, whilst sharing their content with collaborators. Explee’s Business Plan starts from $25 per month.
Do you have experience using video animation tools that have provided an effective medium for your business? We’d love to hear our readers’ experiences and stories about video animation creation.
If you’re looking to create videos for your clinic or practice, bear in mind it does not need to cost you an arm and a leg. People will watch your videos for the informative content, not your moviemaking ability. Creating inexpensive videos is my method of choice when it comes to standing out among the competition.
Video marketing can be an inexpensive and powerful platform to showcase your business. With easy to use apps like Facebook Live, anyone can start streaming videos using their cell phone. Forward thinking clinics that create consistent videos on a regular basis, will not only gain more viewers, but patients. Here are five of my favorite tips to help you effectively use video for your medical practice:
•Education First: An effective video is one that not only educates, but explains. When I started my practice, I created a series of videos on frequently asked questions about my practice. Some of the questions I answered were on how I started start my own clinic, what made me interested in my medical specialty, as well as sharing patient success stories. Answering these questions helped build a level of transparency that helped bridge a comfort level with new patients.
•Keep Your Videos Short and to the Point: I like to keep videos no longer than 10 minutes. Make sure the video title matches exactly what the content of the video is going to cover. You can break up a long video into shorter and more succinct videos. Again, I love the format of asking common questions about your practice, and you can expand that to answering questions about procedures or medical conditions.
•Give Your Viewers an Inside Look: One of the most effective ways that you can use video is giving prospective patients the experience of what it’s like to become a patient. It can be nerve-wracking to be a new patient, a video can put them at ease by showing them the layout of your waiting room or exam room. Provide interviews of key staff members. Walkthroughs of an actual procedure have been known to get a ton of views in my experience.
•Take Advantage of Local Talent and Tools: There are big video marketing firms that can charge upwards of $10,000 to create a video. But did you know that it is easy to find local talent that can be had for pennies on the dollar? One particular resource I have used are wedding videographers. Most videographers aren’t recording weddings seven days a week. On their off days, most will be more than happy to create an appealing video for you to showcase your business at an affordable rate.
If you are interested in creating a video yourself, there are an abundance of video editing software available. An easy way to create video quickly is by answering a commonly asked question using a few Powerpoint slides, and recording them using screen capture software. If you have a PC, I recommend Camtasia. If you own a Mac, the built-in QuickTime Player can create excellent screen capture videos. Personally, I use ScreenFlow on my Mac because it has great editing software and is pretty easy to use. A great online resource is Animoto, which can take still pictures and create dazzling videos on the fly.
•Grab The Viewers:Studies show you need to grab your audience’s attention in the first 10 seconds of the video. If done right, videos can be used as a powerful tool to attract new patients. Videos that teach something new, educate, or explain a concept can often get shared and bookmarked online. If you can get in the habit of creating compelling video, you can take advantage of a powerful an inexpensive marketing strategy for your business.
Who: Entrepreneur and videographer, founder of Retorocle.
What: Retorocle provides cinematography services, creative marketing strategies and YouTube consultations that allow clients to engage global audiences.
French presidential candidates Emmanuel Macron and Marine Le Pen. (Joel Saget, Eric Feferberg/AFP/Getty Images)
This weekend, French voters will return to the polls for the second round of voting in the country’s presidential election.
The election is being watched closely around the world for more reasons than one. Marine Le Pen, perhaps the most visible figure on the European far right, is one of two contenders for the top French political spot, but her rival, centrist Emmanuel Macron, also represents a significant break from the past.
Here is a WorldViews guide to the big vote.
What happens Sunday?
Civil servants prepare electoral documents for the upcoming second round of the 2017 French presidential election in Nice on May 3. (Eric Gaillard/Reuters)
Voters will head to the polls Sunday to cast a vote for the next president of France. Polls will be open from 8 a.m. to 7 p.m. local time (voting is extended to 8 p.m. in some areas). Exit polls will be released shortly afterward, with final results expected within a few hours. Whichever candidate has the most votes on that day will be inaugurated within approximately 10 days.
There are two candidates in this, the second round of the French election:
Le Pen of the National Front:A high-profile figure in the race internationally, Le Pen is expected to lead the party her father founded in 1972 to one of its best election results. Le Pen, 48, has struggled to move the National Front past its far-right core, but she has seen new support from young voters and female voters. Her policies include pulling out of the euro currency and major restrictions on immigration and free movement across borders.
Macron of the En Marche (Onward) movement: In the face of what initially seemed to be a polarized political landscape, Macron — a former investment banker who was educated at elite schools and became a Socialist economy minister — has managed to become the voice of “radical centrism.” The 39-year-old is hoping to become the youngest president in French history, and he aims to do so without the backing of a major party. Voters seem to have been enticed by his moderate rhetoric and plans to lower taxes and expand health care, but critics argue that his policies may fail to entice embittered voters to the polls.
What do the polls say?
The polls show Macron as a clear favorite over Le Pen, with a lead of as much as 20 percent. It’s worth noting that the polls were also remarkably accurate in the first round of voting — which bodes well for the second round, which is generally easier to estimate.
Claire Durand, president of the World Association for Public Opinion Research and a professor at the University of Montreal, told WorldViews last month that she thought the second-round votes would be accurate. “They’ve never missed the second-round vote,” Durand said. “In fact, they usually have it perfectly.”
However, it is possible that Le Pen is undervalued. Notably, there seems to be little appetite among leftist voters to back Macron, despite concerns about a potential far-right presidency.
How did the candidates do in the first round?
There were 11 candidates in the first round of voting, held April 23.
Macron came first with 24.01 percent of the vote, followed by Le Pen with 21.30 percent, Francois Fillon of the center-right Republicans with 20.01 percent, leftist Jean-Luc Mélenchon of the Unsubmissive France movement with 19.58 percent and Benoît Hamon of the center-left Socialist Party with 6.36 percent. As no single candidate got more than 50 percent of the vote (far from unusual in France), Macron and Le Pen were selected for the second round.
Post-vote analysis has shown that Macron performed best in urban areas, including big cities such as Paris, Bordeaux and Lyon. Le Pen’s support was more often in rural areas, including the south and the northeast, where deindustrialization had helped grow National Front support.
Why is this year’s election so unusual?
This year, neither of France’s major parties — the Republicans or the Socialists — made it through to the second round of voting.
This is a major shift. Since the current voting system was introduced in 1965, at least one of these two wings of mainstream French politics has been in the runoff; usually both were. This is partly because of some unique circumstances in 2017. Republican Fillon had been seriously tarnished by corruption allegations, while the record unpopularity of Hollande is a big factor in Socialist Hamon’s slim odds.
However, it also seems to tie into a growing dissatisfaction with mainstream political parties that can be seen in other parts of Europe, too.
What happened the last time a far-right candidate got this far in France?
Marine Le Pen’s father, Jean-Marie Le Pen, unexpectedly entered the runoff in the 2002 election, confounding experts who had widely been expecting him to lose out to two mainstream politicians. The surprise and shock prompted voters of all stripes to come out in the second round of votes against Le Pen, ultimately handing him easily the biggest runoff defeat in the history of the French Fifth Republic.
But history may not repeat itself. Under the younger Le Pen’s leadership, the party has notably outperformed her father in regional and European elections.
Additionally, in 2002, the diverse political world united in what was called a “Republican Front” against the older Le Pen. Nearly 2 million people took part in protests, while French politicians of all stripes asked their supporters to vote for conservative Jacques Chirac. This year, a united front is nowhere to be seen; some prominent figures such as Mélenchon have refrained from endorsing Macron.
What happens next?
Even after the results come out Sunday, the election won’t really be over. There will also be an election to select the French Parliament in June — and that vote also has two rounds.
The parliamentary elections are important in France’s semi-presidential system: Although a French president is the head of state, the prime minister is the head of government and much of the day-to-day work of policymaking happens in France’s parliament, the National Assembly. Generally, the president and the premier are of the same party but sometimes they are not. This is known as “cohabitation” in France, and when it has happened in the past, French premiers have gained significant control over the policymaking process.
This is especially important this year, as neither Macron nor Le Pen is likely to have significant parliamentary backing (Le Pen in particular would struggle, as mainstream parties have vowed not to work with her). The end result may be uncertainty, instability, or both.
Facebook Inc. continues to sweep digital advertising, alongside rival Google, despite unrest among marketers about how their advertising is handled.
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Facebook on Wednesday said first-quarter profit surged 76% to $3.06 billion, allaying concerns that questions over video-ad performance and the spread of violent and graphic content would mar growth. The social network’s soaring results echoed strength at Google parent Alphabet Inc., which last week reported 29% growth in net profit despite a backlash that began late in the quarter from companies upset about their brands being advertised against objectionable videos on its YouTube video platform.
Facebook and its photo-sharing app, Instagram, are the « two most important mobile-ad platforms, » Chief Financial Officer David Wehner said in an interview.
Facebook and Google dominate the online advertising market. The two tech giants snatched 99% of the online-ad industry’s revenue growth last year, estimated Pivotal Research analyst Brian Wieser using data published by the Interactive Advertising Bureau. Facebook holds 16% of the global digital-ad market, behind Google’s 33% share, says forecasting firm eMarketer.
Marketing executives « acknowledge they’re concerned about fake news and the problems Facebook has had with live video, » said eMarketer principal analyst Debra Aho Williamson. « They’re concerned that at some point this will affect users — but they haven’t seen that yet. So that’s why spending keeps going up. »
Facebook’s growing market share in digital advertising has helped drive its stock up 29% over the past year. Other metrics were also strong: the number of users who check into Facebook at least once a month rose to 1.94 billion, for example. However, its share price slipped in after-hours trading on concerns about whether new ad formats will be able to replace the booming growth it has experienced with its news feed ads.
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The 49% jump in quarterly revenue to $8.03 billion was a sign of how marketers are increasingly embracing Facebook and Instagram. Marketing-technology company Kenshoo, which manages about $6 billion in marketing spending a year, said its clients were spending 41% more on social-media ads, largely Facebook.
Years ago, Chief Executive Mark Zuckerberg put mobile at the heart of the company, a focus that has fueled Facebook’s growth for years. Facebook’s ad prices jumped 14% during the first quarter, while the number of ad impressions increased by about a third, as users spent more time on their mobile apps. « Mobile continues to be the driver of our business, » Mr. Wehner said.
Now Mr. Zuckerberg is weaving more video throughout Facebook’s products, adding more opportunities for Facebook to show more-expensive video ads — but also creating new uncertainties.
Video and Instagram could pick up the slack from an anticipated slowdown in advertising in the news feed. On Wednesday, Mr. Wehner reiterated his warning from last year that Facebook’s ad revenue growth will « come down meaningfully over the course of 2017. » Facebook also expects the ad load — the number of ads it can jam into its main news feed — will play a smaller role in driving revenue growth after mid-2017.
Facebook is fielding pitches for TV-like original programming, in the hopes that weekly shows on Facebook will change the way people currently use the platform and eventually draw marketing dollars that have traditionally gone to television.
Facebook is now testing a way to profit from those longer videos through « ad breaks » — ads that appear in the middle of a video — in both live broadcasts and on-demand videos. It also tweaked a setting so sound is on by default in some videos, a move designed to appease advertisers.
If successful, these « ad breaks » will help Facebook convince publishers to create longer videos without the platform paying them outright, executives said. Advertisers are concerned that users will drop off a video once they see an ad in the middle of a video. In addition, Facebook users aren’t accustomed to watching longer videos on the site.
But advertisers aren’t entirely sold on Facebook’s nascent video-ad products. Facebook’s video product remains « uncertain ground, » according to a new report by GroupM, the ad-buying unit of WPP PLC. For every 20 video ads served in the news feed, just one was watched for 10 seconds or longer and three watched for at least three seconds, the report said.
Some of that skepticism lingers from concerns over how Facebook measures video-ad performance, sparked by the company’s disclosure last fall that it had vastly overestimated average viewing time for video ads on its platform for two years.
In addition, concerns about Facebook’s handling of violent, graphic content, especially on its live-video product, could give advertisers pause, some analysts said. Facebook Live, the venue for some of the new video advertising, has been the subject of recent controversy after users broadcast violent videos such as a Cleveland man fatally shooting another man.
Earlier Wednesday, Chief Executive Mark Zuckerberg pledged to hire 3,000 more content reviewers over the next year so inappropriate material is removed from the site more quickly. Last month, Facebook promised to conduct a review of its reporting process.
But demand for Facebook ads isn’t expected to decline anytime soon. According to a RBC Capital Markets survey, 65% of advertisers buying Facebook ads plan to spend even more. Nearly 40% told RBC that they spend more than a fifth of their online budgets on the social network, up from 31% in February 2016, according to the survey published in late March.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
Facebook Inc will add 3,000 people over the next year to monitor reports of inappropriate material on the social media network and removing videos such as murders and suicides, Chief Executive Officer Mark Zuckerberg said on Wednesday.
Zuckerberg, the company’s co-founder, said in a Facebook post the workers will be in addition to the 4,500 people who already review posts that may violate its terms of service.
The hiring spree represents an acknowledgment by Facebook that, at least for now, it needs more than automated software to improve monitoring of broadcasts on Facebook Live, a service that has been marred since its launch last year by instances of people streaming violence.
Last week, a father in Thailand broadcasted himself killing his daughter on Facebook Live, police said. After more than a day, and 370,000 views, Facebook removed the video. Other videos from places such as Chicago and Cleveland have also shocked viewers with their violence.
Zuckerberg said: « We’re working to make these videos easier to report so we can take the right action sooner – whether that’s responding quickly when someone needs help or taking a post down. »
Facebook is due to report quarterly revenue and earnings later Wednesday after markets close in New York.
English cricket officials have been taken to town after a new marketing campaign ahead of the Ashes fell flat with fans.
The England team recently announced a new partnership deal with New Balance, and part of the advertising campaign involved the players signing a letter addressed to their potential next Test player.
Addressed to player No. 677, the poem acts as a call to arms for talented young players.
« DEAR 677…Whoever you might be, » it reads.
« This is England. The home of cricket. Forget what you’ve done before. None of it matters. We’ve taken wickets. Scored runs. Held catches. You’re on the first step of a never ending flight of stairs to success. So start climbing. Do that and you’ll be one of us.
« We’ll teach you. Protect you. Guide and welcome you. But what we can’t do is carry you. So hear this. Out run us, out bowl us, out work us. Take our place in the team. Because if you do that, we’ll win it all. One-day internationals. Twenty Twenty. Tests.
« Being the best in the country is one thing. Being the best in the world is another. Because one thing’s for sure…greatness isn’t given. »
The deal with New Balance also includes new-look uniforms, which captain Joe Root recently said he was a big fan of.
« It’s as traditional as it gets, isn’t it, it’s what Test cricket is about, » Root recently told The Telegraph.
« The guys in 2005 who won the Ashes wore the old cable knit jumper and there are some great iconic moments in English cricket that are associated with clothes like this so hopefully there will be much more in the future.
« It feels like I’m a kid again, playing my first couple of games. It’s like my first woollen jumper my grandma knitted me so it takes it all back to the beginning and it’s a nice way to remind yourself that even though there are times when we’re under a lot of pressure it’s a game we enjoy playing. We have to embrace the occasion, go out and enjoy it. »
But not everyone agrees:
Well the new England cricket kits are awful…whoever thought that was a good idea wants sacking. pic.twitter.com/NKo5CxeY7Q
A.M. Sacconaghi, Jr. – Sanford C. Bernstein Co. LLC
Simona K. Jankowski – Goldman Sachs Co.
Jim Suva – Citigroup Global Markets, Inc.
Operator
Good day, everyone, and welcome to this Apple Incorporated second quarter fiscal year 2017 earnings release conference call. Today’s call is being recorded.
At this time for opening remarks and introductions, I would like to turn the call over to Nancy Paxton, Senior Director of Investor Relations. Please go ahead, ma’am.
Nancy Paxton – Apple, Inc.
Thank you. Good afternoon and thanks to everyone for joining us. Speaking first today is Apple CEO Tim Cook, and he’ll be followed by CFO Luca Maestri. After that, we’ll open the call to questions from analysts.
Please note that some of the information you’ll hear during our discussion today will consist of forward-looking statements, including without limitation those regarding revenue, gross margin, operating expenses, other income and expense, taxes, future business outlook, and plans for capital return and debt issuance. Actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in Apple’s Form 10-K for 2016, the Form 10-Q for the first quarter of 2017, and the Form 8-K filed with the SEC today along with the associated press release. Apple assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
I’d now like to turn the call over to Tim for introductory remarks.
Timothy Donald Cook – Apple, Inc.
Thanks, Nancy. Good afternoon and thank you for joining us.
Today we are reporting strong March quarter results, with accelerating revenue growth and earnings per share up 10% over last year. We feel great about this performance. Revenue was $52.9 billion, near the high end of our guidance range. Global revenue was up 5% year on year, with growth accelerating from our December quarter performance. That’s despite a $1 billion year-over-year revenue headwind from foreign exchange in the March quarter and a larger iPhone channel inventory reduction this year versus last year.
iPhone sales were line in line with our expectations, and we’re thrilled to see the continued strong demand for iPhone 7 Plus with its beautiful large display and dual-camera system. Our active installed base of iPhones grew by double digits year over year. And based on the latest data from IDC, we gained market share in nearly every country we track.
Late in the quarter, we released the stunning (PRODUCT)RED Special Edition versions of iPhone 7 and iPhone 7 Plus in recognition of 10 years of our partnership with RED. This relationship has given our customers an unprecedented way to contribute to the global fund and bring the world a step closer to an AIDS-free generation. We’ve seen wonderful customer response to these eye-popping new iPhones.
For the second quarter in a row, our Services revenue topped $7 billion, and it’s well on the way to being the size of a Fortune 100 company. We’re very happy to see the deep level of customer engagement with the Apple ecosystem across all of our services.
App Store momentum is terrific, with revenue growing 40% year over year to an all-time quarterly record. The number of developers offering apps for sale on our store was up 26% over last year, and we’re thrilled to see their success.
We also saw double-digit revenue growth from Apple Music subscriptions and iCloud storage and overall very strong growth in the total number of paid subscriptions for our own services and the third-party content we offer on our stores. Paid subscriptions now exceed 165 million.
Apple Pay is experiencing phenomenal traction. With the launch of Taiwan and Ireland in the March quarter, Apple Pay is now live in 15 markets with more than 20 million contactless-ready locations, including more than 4.5 million locations accepting Apple Pay in the U.S. alone.
We’re seeing strong growing usage as points of acceptance expand, with transaction volume up 450% over the last 12 months. In the UK, for example, points of acceptance have grown by 44% in the last year, while monthly Apple Pay transactions have grown by nearly 300%. In Japan, where Apple Pay launched last October, more than 0.5 million transit users are completing 20 million Apple Pay transactions per month. And we’re always excited to see our partners bring their customers new ways to use Apple Pay. You can now even send a Starbucks gift card via iMessage with just a touch.
We’re seeing great momentum from our powerful advances in Messages. In fact, at one point during the Super Bowl in February, customers were sending 380,000 Messages per second, more than double the previous year. A few weeks ago, we introduced Clips, a new app that’s another great example of how we’re continually making our products even more engaging, and it’s off to a great start. With Clips, it’s fun and easy to combine video, photos, and music on an iPhone or an iPad into great-looking expressive videos with great visual effects and titles just using your voice, then share your clips with friends through the Messages app or on social media.
We had great Mac results during the quarter. Revenue grew 14% to a new March quarter record and gained market share thanks to strong demand for our new MacBook Pros. Our Mac business has generated over $25 billion in revenue over the past four quarters. We’re investing aggressively in its future, and we are very excited about the innovation we can bring to the platform.
We also updated our most popular sized iPad with a brighter Retina display and best-in-class performance at its most affordable price ever, and customer response to date has been very strong. iPad results were ahead of our expectations, and we believe we gained share during the March quarter in a number of major markets, including the U.S., Japan, and Australia. iPad remains the world’s most popular tablet, and it’s the primary computing device for millions of customers across the globe.
Building on the momentum from the holiday quarter, Apple Watch sales nearly doubled year over year. Apple Watch is the best-selling and most loved smartwatch in the world, and we hear wonderful stories from our customers about its impact on their fitness and health.
We’re also seeing great response to AirPods, with a 98% customer satisfaction rating based on a recent Creative Strategy survey. Demand for AirPods significantly exceeds supply, and growth in Beats products has also been very strong. In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenue from wearable products in the last four quarters was the size of a Fortune 500 company.
In Greater China, we were very pleased to see strong double-digit revenue growth from both Mac and Services during the March quarter. We also had great results from our retail stores in mainland China, with total store revenue up 27% over last year and comp store revenue up 7%. These results contributed to our improving performance in Greater China. Through the first two quarters of fiscal 2017, our year-over-year comparisons improved significantly over the last two quarters of fiscal 2016. First half revenue was down 13% year over year, about a third of which was attributable to FX. That’s in contrast to a 32% revenue decline in the second half of last year. Our March quarter results were in line with our expectations, and similar to the year-over-year performance we experienced in the December quarter. We continue to be very enthusiastic about our opportunity in China.
We set a new March quarter record for India, where revenue grew by strong double digits. We continue to strengthen our local presence across the entire ecosystem, and we’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure.
Apple Retail is entering an exciting chapter with new experiences for customers and breathtaking new store designs. With the opening of our newest store in Dubai this past weekend, we now have 495 retail locations worldwide. The new Apple Dubai Mall is a truly international store, with employees who collectively speak 45 languages, and are already welcoming customers from around the world.
As Luca will discuss in a moment, today we’re also providing an update to our capital return program. Given our strong confidence in our future, we’re increasing the program size by $50 billion, bringing the total to $300 billion, and we’re extending the timeframe through March of 2019. We’re adding to our share repurchase authorization and increasing our dividend for the fifth time in less than five years.
We’re very excited about our upcoming Worldwide Developers Conference taking place in San Jose next month. The conference is significantly oversubscribed, and we’ll be welcoming thousands of attendees. We look forward to helping them learn about breakthrough technologies across all four of our software platforms – iOS, macOS, watchOS and tvOS – that enable developers to create incredible experiences for every aspect of customers’ lives and improve the way they manage their homes, cars, health, and more.
I’m very proud to mention that we recently released our 10th annual Environmental Responsibility Report, reflecting our amazing progress. In 2016, 96% of the electricity used at Apple’s global facilities came from renewable sources of energy, reducing our carbon emissions by nearly 585,000 metric tons. We’re now 100% renewable in 24 countries, including all of Apple’s data centers. There’s much more work to be done, but we’re committed to leaving the world better than we found it.
Closer to home, we’re excited about moving into our new corporate headquarters, Apple Park, our new center for innovation. The main building on Apple Park is designed to house 13,000 employees under one roof in an environment that fosters even greater collaboration among our incredibly talented teams.
We have many more ongoing investments in the United States economy, since Apple is a company that could only have been created in America. Through our innovative products and the success of our business, we’re incredibly proud to support more than 2 million jobs in all 50 states, and we expect to create even more. Last fiscal year, we spent more than $50 billion in the United States with American suppliers, developers, and partners, and we continue to invest confidently in our future.
Now for more details on the March quarter results, I’d like to turn the call over to Luca.
Luca Maestri – Apple, Inc.
Thank you, Tim. Good afternoon, everyone.
Revenue for the March quarter was $52.9 billion, and we achieved double-digit growth in the U.S., Canada, Australia, Germany, the Netherlands, Turkey, Russia and Mexico. Our growth rates were even higher, over 20% in many other markets, including Brazil, Scandinavia, the Middle East, Central and Eastern Europe, India, Korea and Thailand.
Gross margin was 38.9%, at the high end of our guidance range. That’s a sequential increase from 38.5% in the December quarter, which is particularly impressive given the seasonal loss of leverage, sequential foreign exchange headwinds of 100 basis points, and cost pressures on certain commodities. Operating margin was 26.7% of revenue and net income was $11 billion. Diluted earnings per share were $2.10, an increase of 10% over last year, and cash flow from operations was strong at $12.5 billion.
For details by product, I’ll start with iPhone. We sold 50.8 million iPhones, and we reduced iPhone channel inventory by 1.2 million units in the quarter, compared to a reduction of about 450,000 a year ago. So our iPhone performance was slightly better than last year on a sell-through basis.
We had very solid iPhone growth in four of our five operating segments and experienced especially strong results in Western Europe, the Middle East, and our Rest of Asia-Pacific segment, all areas of the world where iPhone sales were up double digits. iPhone ASP was $655, up from $642 a year ago, thanks to a strong mix of iPhone 7 Plus and in spite of unfavorable foreign exchange rates. We exited the March quarter within our five to seven-week target channel inventory range.
Customer interest and satisfaction with iPhone are very strong, not only with consumers but also with business users. In the U.S., the latest data from 451 Research on consumers indicates a 96% customer satisfaction rating among iPhone 7 owners and 98% for iPhone 7 Plus. Among corporate smartphone buyers, iPhone customer satisfaction was 95%. And of those planning to purchase smartphones in the June quarter, 79% plan to purchase iPhone.
Turning to Services, we generated $7 billion in revenue, an increase of 18% year over year and our best results ever for a 13-week quarter. We’re very happy with the strong level of growth, especially given the tough compare to last year, as the busy week between Christmas and New Year’s fell within the March fiscal quarter a year ago but was included in the December fiscal quarter this year. As we said last quarter, our goal is to double the size of our Services business by 2020.
The App Store established a new all-time revenue record and grew 40% year over year. We continue to see growth in average revenue per paying account as well as the number of paying accounts across our content stores during the quarter. In fact, the quarterly increase in the number of paying accounts was the largest that we’ve ever experienced. And according to App Annie’s latest report, the App Store continues to be the preferred destination for customer purchases, generating twice the revenue of Google Play during the March quarter.
Next I’d like to talk about the Mac. Revenue was up 14% year over year and set a new March quarter record. We sold 4.2 million Macs, up 4% over last year, compared to zero growth in the PC market according to IDC’s latest forecast. Demand for MacBook Pro was very strong, helping to drive overall portables growth of 10%, twice the growth of the portables market. We ended the quarter at the low end of our four to five-week target range for Mac channel inventory.
Turning to iPad, we sold 8.9 million units, which was ahead of our expectations despite supply constraints throughout the quarter. We are very pleased to see iPad growth in the U.S. during the March quarter and revenue growth worldwide for our 9.7-inch and larger iPads over the last four quarters. iPad channel inventory was essentially flat from the beginning to the end of the quarter, and we exited just below our five to seven-week target range.
iPad remains very successful in the segments of the tablet market where we compete. Recent data from NPD indicates that iPad had 81% share of the U.S. market for tablets priced above $200. And in February, 451 Research measured consumer satisfaction rates for iPad that range from 95% for the 9.7-inch iPad Pro to 100% for the 12.9-inch version. Among U.S. consumers planning to purchase a tablet within the next six months, purchase intention for iPad was 69%. Corporate buyers reported a 96% satisfaction rate and a purchase intent of 68% for the June quarter.
All our products continue to be extremely popular and drive more buying transformation in the enterprise market. We set a new enterprise revenue record for the March quarter, and we expect this momentum to continue for the remainder of the year.
Recently, Volkswagen selected iPhone as their corporate standard smartphone, so 620,000 employees around the world have the opportunity to enjoy the best-in-class mobile experience that iPhone offers. And Capital One has reimagined the customer banking experience by empowering their associates with Mac and Apple Watch and over 40 native iOS applications now running on nearly 30,000 iPhones and iPads.
We’re also seeing strong momentum with our enterprise partners, who are helping us deliver long-lasting innovation and differentiation for iOS versus competing platforms. The Deloitte partnership is off to a great start, with more than 115 customer opportunities in the pipeline across 15 different industries.
SAP released the SAP Cloud Platform SDK for iOS at the end of March, and over 3 million SAP developers now have an even better means to develop powerful iOS-native apps for the enterprise.
The partnership with Cisco enables optimized performance of iOS devices over their networks and is generating a large and growing pipeline of sales opportunities across multiple verticals, including healthcare and financial services.
And our partnership with IBM continues to drive greater productivity and innovation, with IBM Mobile First for iOS apps now in more than 3,300 client engagements. And with its Mobile at Scale offering, IBM recently closed an agreement to deploy 11,000 iOS devices at Santander Bank to drive digital transformation.
Our retail and online stores produced great results, with strong revenue growth in all our geographic segments and 18% growth overall. Visitors to our retail and online stores were up 16% over last year, and we added four new stores during the March quarter. And with the opening of our store in Dubai last week, we’re now at 495 stores in 18 countries.
Let me now turn to our cash position. We ended the quarter with $256.8 billion in cash plus marketable securities, a sequential increase of $10.8 billion. $239.6 billion of this cash, or 93% of the total, was outside the United States. We issued $11 billion in debt during the quarter, bringing us to $88.5 billion in term debt and $10 billion in commercial paper outstanding.
We returned over $10 billion to investors during the quarter. We paid $3 billion in dividends and equivalents, and we spent $4 billion on repurchases of 31.1 million Apple shares through open market transactions. We also launched a new $3 billion ASR, resulting in initial delivery and retirement of 17.5 million shares. And we retired 6.3 million shares upon the completion of our ninth accelerated share repurchase program in February. All these activities contributed to a net diluted share count reduction of 66.3 million shares in the quarter. We have now completed $211.2 billion of our $250 billion capital return program, including $151 billion in share repurchases.
As Tim mentioned, today we’re announcing an update to our program, which we are extending by four quarters through March of 2019, and increasing in size to a total of $300 billion. Once again, given our strong confidence in Apple’s future and the value we see in our stock, we are allocating the majority of the program expansion to share repurchases. Our board has increased the share repurchase authorization by $35 billion, raising it from the current $175 billion level to $210 billion. We will also continue to net share settle vesting employees’ restricted stock units.
In addition, we’re raising our dividend for the fifth time in less than five years. As we know, this is very important to many of our investors who value income. The quarterly dividend will grow from $0.57 to $0.63 per share, an increase of 10.5%. This is effective with our next dividend, which the board has declared today, payable on May 18, 2017 to shareholders of record as of May 15, 2017. With over $12 billion in annual dividend payments, we’re proud to be one of the largest dividend payers in the world, and we continue to plan for annual dividend increases going forward. In total, with this updated program, during the next eight quarters we expect to return $89 billion to our investors, which represents about 12% of our market cap at the current stock price.
We expect to continue to fund our capital return program with current U.S. cash, future U.S. cash generation and borrowing from both domestic and international debt markets. We will continue to review capital allocation regularly, taking into account the needs of our business, investment opportunities, and our financial outlook. We’ll also continue to solicit input on our program from a broad base of shareholders. This approach will allow us to be flexible and thoughtful about the size, the mix, and the pace of our program.
As we move ahead into the June quarter, I’d like to review our outlook, which includes the types of forward-looking information that Nancy referred to at the beginning of the call. We expect revenue to be between $43.5 billion and $45.5 billion. We expect gross margin to be between 37.5% and 38.5%. We expect OpEx to be between $6.6 billion and $6.7 billion. We expect OIE to be about $450 million, and we expect the tax rate to be about 25.5%.
With that, I’d like to open the call to questions.
Nancy Paxton – Apple, Inc.
Thank you, Luca, and we ask that you limit yourself to one one-part question and one follow-up. Rebecca, may we have the first question, please?
Question-and-Answer Session
Operator
First we’ll hear from Katy Huberty with Morgan Stanley.
Kathryn Lynn Huberty – Morgan Stanley Co. LLC
Yes, thanks. My first question is for Luca around gross margins. How were you able to expand gross margins sequentially and guide rather seasonally for the June quarter in light of what’s going on in the memory market. And maybe if you can, comment in particular whether the whole back of payments to Qualcomm is benefiting you at all on gross margins year on year, and also whether your contracts around commodity prices is likely to hit gross margins by more in the back half of this calendar year.
Luca Maestri – Apple, Inc.
Thank you, Katy, a lot of questions. Let me take them one by one. Let me start with our performance for the March quarter, which we were very happy with. As you said, we were up 40 basis points sequentially. And this is in spite of the fact, as you know, that we lose leverage as we go from the December quarter to the March quarter. The foreign exchange headwind on a sequential basis was 100 basis points. Obviously, that was also a negative. And as you said, we started to experience some level of cost pressure on the memory side, particularly on NAND and DRAM. To offset that, and actually do better than that, we had very good cost performance on other commodities. And the fact that our Services mix increases as we go through the year, that is of course also helping, given the profile of our gross margin for Services. So that answers the question around Q2.
As we move into the June quarter, as you know, we tend to have some level of gross margin compression as we go from the March quarter to the June quarter. Again, the majority of that comes from the sequential loss of leverage. We also have a different mix of products as we move into the June quarter, and the cost pressures on memory will remain. We expect to offset partially these impacts with other cost efficiencies, and again, with a mix shift towards Services. The impact on NAND and DRAM will continue to be there, and we expect it to be there. You know we don’t guide past the June quarter, but we expect it to be there for the time being.
On Qualcomm, I just want to make it very, very clear that we are accruing. We do not expect to be paying more than what we are accruing right now. So we didn’t get any benefit in our PL, in our margins, during the March quarter, and we’re not getting any benefit during the June quarter either.
Kathryn Lynn Huberty – Morgan Stanley Co. LLC
Okay, thank you. And just a follow-up for Tim, as you noted in your remarks, the iPhone 7 Plus demand, it’s selling incredibly well. And this was a product that was pretty severely supply-constrained in the December quarter. And I just wonder whether there are any lessons learned as you go forward into future product launches around how you manage the timing of announcing a product when there are supply constraints, and how you might work with the supply chain differently around ramping some of these components that have particular difficulties around the yields early on.
Timothy Donald Cook – Apple, Inc.
Katy, one of the things that we did not get right was the mix between the iPhone 7 and the iPhone 7 Plus. There was – wound up that demand was much stronger to the iPhone 7 Plus than we had predicted. And so it took us a little while to adjust all the way back through the supply chain and to bring iPhone 7 Plus into balance, which occurred early this past quarter.
What did we learn from it? Every time we go through a launch, we learn something. And you can bet that we’re brushing up our models, and we’ll apply everything we learn to the next time.
Kathryn Lynn Huberty – Morgan Stanley Co. LLC
Thank you.
Nancy Paxton – Apple, Inc.
Thank you, Katy. Could we have the next question, please?
Operator
We’ll go to Shannon Cross with Cross Research.
Shannon S. Cross – Cross Research LLC
Thank you very much. Tim, can you talk a bit about what’s going on in China and give us some more color, especially as you’re going through the year? And then obviously you won’t talk about the next product launch, but just are there any shifts in demand with Greater China down 14%? Was it all iPhone, or a mix? Anything you can provide, and then I have a follow-up.
Timothy Donald Cook – Apple, Inc.
Yes, thanks for the question, Shannon. We saw in Q2 a performance that combined with Q1 to form the first half of the year was much better than what we experienced in the second half of last year. And if you look at what was driving that, iPhone 7 Plus, we sold the highest number of Plus models in the first half than ever before, compared to 6s Plus or compared to the 6 Plus. Also, the Mac business did extremely well. The Mac revenue growth was up 20% in China, and we had extremely strong Services growth during the quarter in China.
As I mentioned in my comments, our retail and online stores did well overall and in China. They grew by 21%, which is an acceleration from what we had seen in the previous quarter. And traffic – which for us is incredibly important in the retail stores because we do a lot more than sell – traffic was up 27% year on year. And now seven of our top ten highest traffic stores in the world are in Greater China. And so that’s the set of things that went in our direction, so to speak.
On the flip side, currency devalued by 5%, and so that’s not an insignificant headwind. And our performance continued to be weak in Hong Kong, which has been hit a bit harder as the tourism market continues to slump. Also, where the iPhone 7 Plus did well, we didn’t perform as well on some of the previous generation iPhones. And so that’s the set of things on the plus and minus side.
We did perform about where I thought we would. At least I thought it would be similar to the previous quarter, and it was. What I now believe is that we’ll improve a bit more during this current quarter, not back to growth, but improve – but make more progress. And we continue to believe that there’s an enormous opportunity there. And in the scheme of things, our business is pretty large there.
Shannon S. Cross – Cross Research LLC
Great, thank you. And then I don’t know if Luca wants to take this, but thoughts on cash usage. You increased your program, but you still have I think $160 billion of net cash and obviously continue to generate cash. So I’m curious as to, given some of the commentary that’s come out of the administration, which I think most companies were expecting some sort of return, how do you generally think about what you need to run the business from a cash perspective, how you think about the balance sheet from a strength perspective as we look forward to what hopefully will come through?
Luca Maestri – Apple, Inc.
Shannon, you know how we run our capital return program. We’ve been pretty consistent during the last five years. Essentially for the last five years, the way we’ve run the company is essentially to return our free cash flow to our investors. That’s what we’ve done with the program until now, and the expansion of the program that we’ve announced today goes in the same direction. We know how much we need to invest in the business. We will never underinvest in the business. We’re in a very fortunate position that we generate cash beyond the needs that we have. And given the current capital structure that we have, we decided that until now we return about 100% of the free cash flow to investors.
It’s difficult for us to speculate about what might or might not happen. The program that we’re announcing today reflects the current tax legislation in this country, and there’s a lot that still needs to happen there, and we’ll see. Obviously, we will reassess our situation if things change.
Nancy Paxton – Apple, Inc.
Thank you, Shannon. Can we have the next question, please?
Operator
From JPMorgan, Rod Hall.
Rod Hall – JPMorgan Securities LLC
Hi, guys. Thanks for taking my questions. I wanted to start off just going back to the 165 million subscriptions and ask Tim or Luca if you could comment on the unique number of users there. And I think you had made a comment, Tim, in your prepared remarks that the average revenue per user was up, or maybe that was you, Luca. But if you guys could just talk about any more color around that average revenue per user, it would be interesting to us. And then I have one follow-up to that. Thanks.
Luca Maestri – Apple, Inc.
Yes, I’ll take it, Rod. We don’t disclose into the number of subscriptions. Of course, we’re just giving you the total count of subscriptions that are out there. Of course, there are several customers that subscribe to more than one of our services. There is some level of overlap, but the total number of subscribers is very, very large, obviously less than 165 million. But it’s very good for us to see the breadth of subscriptions that we offer and that customers are interested in. It’s a large number.
And if you remember, we quoted the same number a quarter ago and we talked about 150 million. So when you think about a sequential increase of 15 million subscriptions from the December quarter to the March quarter, it really gives you a sense for the momentum that we have on our content stores. It’s quite impressive to add 15 million subscriptions in 90 days.
As we look at the dynamics that are happening on our content stores, particularly on the App Store, which is the largest, we see fairly consistently two things. We see that the number of paying accounts is growing a lot. And I mentioned the increase in number of paying accounts that we value in this last 90 days is the largest that we’ve ever had. So this very large number of people coming into the ecosystem, experiencing the ecosystem, which is obviously improving all the time in quality and quantity, and then start paying and transacting on our stores, and that number is growing very, very strongly, strong double digits.
What we’re also seeing as we look at people that start paying on our stores, we see a pretty common trend over time. And we keep track of that across cohorts of customers, that as people come into the ecosystem and start paying on the ecosystem, we see a spending profile that is very similar around the world. People start at a certain level and then they tend to spend more over time. And so obviously, the combination of people spending more over time and adding more people that are now actually spending on the stores contributes to this 40% growth that Tim mentioned for the App Store on a year-over-year basis.
Rod Hall – JPMorgan Securities LLC
Okay, thanks, Luca, and then I had a follow-up for Tim. Tim, I wanted to just ask. The Services revenue keeps growing, and of course the profit contribution from that is growing. And we’ve also at the same time I think seen you maybe a little more aggressive than Apple has been historically in pricing certain key technologies, let’s call them, that maybe you want to penetrate the market with. I just wonder if you could just comment a little bit on your strategy there in terms of the usage of that extra profit contribution from that Services business, how you intend to apply it to the rest of the business. Thank you.
Timothy Donald Cook – Apple, Inc.
Rod, the way that we think about pricing is we come up with a price that we think is a good value for the product that we’re delivering, and we do that on the hardware side as well as on the Services side. And so that’s how we think about it. We’re really not thinking about taking profits from one to subsidize the other or vice-versa.
Rod Hall – JPMorgan Securities LLC
Great, thank you very much.
Timothy Donald Cook – Apple, Inc.
Yes.
Nancy Paxton – Apple, Inc.
Thanks, Rod. Could we have the next question, please?
Operator
From UBS, Steve Milunovich.
Steven M. Milunovich – UBS Securities LLC
Thank you. Tim, could you comment on the opportunity in wearables? The watch, some people consider disappointing, had what seems to be a very good quarter, and ironically the competition almost seems to be fading in that part of the market right now. The AirPods of course are doing well. Do you see wearables: A), expanding over time into a broader product line; and B), increasingly being independent of the iPhone longer term?
Timothy Donald Cook – Apple, Inc.
Thanks for the question. We have seen the watch as a really key product category for us since before we launched it. We took our time to get it right, and we’ve made it even better with the Series 2 offering. And we’re really proud of the growth of the business. The watch units more than doubled in six of our top ten markets, which is phenomenal growth, particularly in a non-holiday quarter. And so we couldn’t be more satisfied with it.
As some people are doing when you begin to combine the watch revenues with the revenues for AirPods, and as you know, this was the first full quarter of shipments for AirPods. It’s still very much in the ramping mode, and we’re not coming close to satisfying the demand. And then add the Beats products that a group of our customers really enjoy as well, and look on the trailing 12 months – so this is not a forecast – that business was well into the Fortune 500. And so as I look at that, that’s pretty fast to come that far. The watch hasn’t out very long and AirPods has been out there for three, four months, and so we feel really great about it.
Where does it go? I wouldn’t want to comment on that, but we do have a really great pipeline here. And I think in terms of competition falling out and so forth, the watch area is really hard. It in essence from an engineering point of view is similar to a phone in terms of the intricacies and so forth. And so I’m not very surprised that some people are falling out of it. But we’re very committed to it and believe that – it’s already a big business and believe over time it will be even larger. Thanks for the question.
Steven M. Milunovich – UBS Securities LLC
Thank you. And then there was a – you mentioned the 451 Research survey. They did have a couple findings that were interesting. One is a nine-year low in iPhone purchase intent, and that might just be where you are in the cycle. And the other was a declining retention rate in the U.S. toward 80%. Any comment on either of those and whether you’re concerned?
Timothy Donald Cook – Apple, Inc.
I only glanced at it, and so I haven’t had time to study it. But in general, what we are seeing, we’re seeing what we believe to be a pause in purchases on iPhone, which we believe are due to the earlier and much more frequent reports about future iPhones. And so that part is clearly going on, and it could be what’s behind the data. I don’t know, but we are seeing that in full transparency.
Steven M. Milunovich – UBS Securities LLC
Thank you.
Timothy Donald Cook – Apple, Inc.
Thanks for the question.
Nancy Paxton – Apple, Inc.
Thank you, Steve. Can we have the next question, please?
Operator
From Bernstein, we’ll go to Toni Sacconaghi.
A.M. Sacconaghi, Jr. – Sanford C. Bernstein Co. LLC
Yes, thank you. I have two as well. First, Tim, I’m wondering if you can comment on your recent decision and the rationale for withholding royalty payments to Qualcomm. And really specifically, I wonder what you believe is the risk that Qualcomm could have a detrimental response, such as withholding modem chip sales or potentially even getting an injunction on iPhones in select geographies around the world. And I’d like to understand your perspective on whether either of those are real risk to any degree. And why would Apple potentially take on those risks just in advance of what will arguably be your most significant and largest product launch in history?
Timothy Donald Cook – Apple, Inc.
Anyone that has a standards-essential patent has a responsibility to offer it to everyone that would like it under what are called FRAND terms. FRAND stands for fair, reasonable, and non-discriminatory terms. That’s both the price and the business terms. Qualcomm has not made such an offer to Apple. And so I don’t believe that a – I don’t believe anyone is going to decide to enjoin the iPhone based on that. I think that there’s plenty of case law around that subject, but we shall see.
In terms of why we’re withholding royalties, you can’t pay something when there’s a dispute about the amount. You don’t know how much to pay. And so they think we owe some amount, we think we owe a different amount, and there hasn’t been a meeting of the minds there. And so at this point, we need the courts to decide that. Unless we are able to, over time, settle between us on some amount, but right now we’re depending upon the courts to do that. And so that is the thinking.
The reason that we’re pursuing this is that Qualcomm’s trying to charge Apple a percentage of the total iPhone value. And they do some really great work around standards-essential patents, but it’s one small part of what an iPhone is. It’s not – it has nothing do with the display or the Touch ID or a gazillion other innovations that Apple has done. And so we don’t think that’s right, and so we’re taking a principled stand on it. And we strongly believe we’re in the right, and I’m sure they believe that they are. And that’s what courts are for. And so we’ll let it go with that.
A.M. Sacconaghi, Jr. – Sanford C. Bernstein Co. LLC
Thank you. I was wondering if I could just follow up a little bit on iPhone demand. If I try and adjust for the drawdown in inventory and the extra week last quarter, I think sequentially iPhones declined about 27% if I make those adjustments. And that’s actually quite a bit lower than the normal seasonality we would see from Q1 to Q2, which is typically closer to 20%. I understand your comments around China, but your comparison was 40 points easier this quarter relative to last quarter. And the growth rate improved only marginally, I think, when you adjust for the extra week. And then you made a final comment around a pause on iPhones.
So I’m wondering if you could maybe elaborate on, was the below sequential, at least by my calculation, growth rate in Q2 attributable to a pause? And can you characterize what you think upgrade rates are doing, perhaps broadly by geography, to help us better understand what might be happening, or whether there are competitive dynamics that also are at play here that, again, might be contributing to that pause and that sequential decline that I referenced? Thank you.
Timothy Donald Cook – Apple, Inc.
There are a lot of questions there. Let me give you some color as I see it. In this quarter, we reduced channel inventory by 1.2 million units. And so if you look on a year-over-year basis, which is primarily what we look at from a unit point of view because it would have the seasonality embedded in that, we grew sell-through on a year-over-year basis. Last quarter, I’m sure other folks remember, was a 14-week quarter, and so you have to adjust the rates last quarter to get at what the underlying sell-through growth was. And so I think that when you do that, you’re going to find that actually the year-over-year performance is similar between the quarters.
In terms of upgraders, we saw the largest absolute number of upgraders ever in any six-month period in the first half of this year, first half of this fiscal year to be precise. And we saw the largest absolute number of switchers outside of Greater China in the same period that we’ve ever seen. And so in four of the five operating segments, as I think Luca mentioned in his comments, we had very good growth. And it was really propelled by the demand for iPhone 7 Plus, which is growing incredibly fast around the world. And so that’s kind of the color I would add there, and hopefully some of that is useful for you.
Nancy Paxton – Apple, Inc.
Thank you, Toni. Could we have the next question, please?
Operator
We’ll go to Simona Jankowski with Goldman Sachs.
Simona K. Jankowski – Goldman Sachs Co.
Hi, thank you. I had a question for Luca first. Last year, you had a 4 million-unit channel inventory reduction for the iPhone in the June quarter. So just curious what you’re expecting for this year just so we have an apples-to-apples comparison as we think about your guidance.
Luca Maestri – Apple, Inc.
As you know, Simona, we do not provide guidance around units and around channel inventory reduction, but our goal is always to have the right amount of weeks of inventory in the channel. And if you look at our history over the last several years, we have fairly consistently reduced channel inventory in the June quarter, so I think it’s a fair expectation to have.
Simona K. Jankowski – Goldman Sachs Co.
Thank you, and then just for Tim. Tim, you’ve been excited about the India market for some time and have made strides in establishing a retail, manufacturing, and RD presence there. So just curious as you look at that market and the rollout of 4G there, is it reasonable for us to assume that Apple can sell something on the order of 10 million to 20 million iPhones there next year and then grow from there?
Timothy Donald Cook – Apple, Inc.
We make it a point not to forecast by geo. We just provide a current quarter forecast. But as hopefully you’ve seen as we began to give you more information about India, we’ve been investing quite a bit. We have a ton of energy going into the country on a number of fronts, and it is the third largest smartphone market in the world today behind China and the United States. And so we believe, particularly now that the 4G infrastructure is going in the country and is continuing to be expanded, that there is a huge opportunity for Apple there. And so that and the demographics of the country is why we’re putting so much energy there.
Simona K. Jankowski – Goldman Sachs Co.
Thank you.
Nancy Paxton – Apple, Inc.
Thank you, Simona. Could we have the next question, please?
Operator
Jim Suva with Citigroup.
Jim Suva – Citigroup Global Markets, Inc.
Thank you very much and congratulations on returning to growth consistently. That’s great. I believe, Tim, in your prepared comments you mentioned India was growing double digit, which is great. But I believe if you look at geographic information, India is really underpenetrated from an Apple reception perceptive, but yet they have LTE, you have the iPhone SE, a lower priced iPhone. Do you think that say this next 12 – 18 months is going be a turning point, or is it more you need to work with the government to have Apple-owned stores or production there? Or what’s it really going to take to get India going along because we think it’s just truly a great opportunity?
Timothy Donald Cook – Apple, Inc.
We think it’s a great opportunity too, and so we’re bringing all the things that we brought to bear in other markets that we’ve eventually done well in, and that’s from channel to stores to our ecosystem and so forth. Phil [Schiller] was just over there opening a developer center last quarter, and so there are a ton of things going on there. And we agree that we are underpenetrated there. Our growth rates are good, really good by most people’s expectations, maybe not mine as much. And so we’re putting a lot of energy in, just like we have in other geos that eventually wound up producing more and more. So I’m very excited about it.
The 4G network investment really began rolling in in a significant way toward the last quarter of last year, as you know. But they are moving fast. They’re moving at a speed that I have not seen in any other country in the world once they were started, and it is truly impressive.
Jim Suva – Citigroup Global Markets, Inc.
Great, thanks so much for the detail. That’s greatly appreciated.
Timothy Donald Cook – Apple, Inc.
Yes.
Nancy Paxton – Apple, Inc.
Thank you, Jim. A replay of today’s call will be available for two weeks as a podcast on the iTunes Store, as a webcast on apple.com/investor, and via telephone, and the numbers for the telephone replay are 888-203-1112 or 719-457-0820. Please enter confirmation code 3540172. And these replays will be available by approximately 5:00 PM Pacific Time today.
Members of the press with additional questions can contact Kristin Huguet at 408-974-2414. And financial analysts can contact Joan Hoover or me with additional questions. Joan is at 408-974-4570, and I am at 408-974-5420. And thank you again for joining us.
Operator
Ladies and gentlemen, that does conclude today’s presentation. We do thank everyone for your participation.
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