5 Surprises in Apple's Earnings Report

It really wasn't a surprise to see Apple (AAPL) deliver a blowout quarter after Tuesday's market close. Anyone walking past an Apple store over the holidays likely saw a flurry of customer activity for the iPhone 6 and the even larger iPhone 6 Plus.

With revenue climbing 30 percent and earnings per share soaring 48 percent, it's a welcome reminder that you can never be too big to deliver market-thumping growth. However, let's dig into some of the gems in Apple's report that you may not have seen coming or that just aren't being widely reported.

1. It's All About the iPhone

Apple's game-changing smartphone has been its biggest driver in recent years, but it's never been as important as it is right now. It's the only of Apple's four product categories to post double-digit year-over-year revenue growth, and it accounted for a record 68.6 percent of the company's revenue during the holiday quarter.

Apple has never had so many of its eggs in the iPhone basket. It's certainly hard to complain about a blowout report with a record 74.5 million iPhones sold, but it would be nice to see another division playing along. After all, back out the iPhone and revenue at Apple declined nearly 7 percent since the prior year.

2. You're Paying More for Your iPhone

Apple experienced a 46 percent increase in the number of iPhones it sold during the quarter relative to last year's holiday quarter, but iPhone revenue came through with a 57 percent pop. Revenue growing faster than units means that Apple's average selling price is moving higher.

Divide iPhone revenue by the number of units and Apple's average selling price clocked in at a record $687 for the quarter, up nicely from an average $637 a iPhone a year earlier. The big reason for the boost is the introduction of the iPhone 6 Plus, priced at $100 more than previous smartphones because of its larger size.

3. Apple Watch Is Still on Track

Apple has been surprisingly quiet about the Apple Watch since unveiling the prototype late last year, but it's still coming. Apple CEO Tim Cook is sticking to the "early 2015" timeline for retail availability, expecting the smart watch to hit the market in April.

It's just as well. Apple can't rush this. It needs a hit to take the pressure off the iPhone, and with record iPhone sales -- and a record number of Android users switching to Apple -- the stage is set for a high-tech smartphone accessory to succeed. Some reports indicate that the battery life has been pretty meager, and that could be a deal breaker if it's not fixed.

4. Cook Concedes That It's Cannibalizing iPad Sales

It was another brutal quarter for the iPad, with Apple's tablet sales plunging 22 percent. That's not a surprise. What is a surprise is that Cook was pretty candid about the iPad's problems. He admitted that the upgrade cycle is longer for tablets than it is for smartphones. He also admitted that the Mac revival and booming iPhone performance are eating into iPad sales.

Cook even used the term "cannibalization," and he's right. As the iPhones get bigger, it makes sense. There probably isn't much of a need for someone with an iPhone 6 Plus to buy an iPad mini.

5. Apple Believes This Will Be the Year of Apple Pay

Apple's payment platform may appear to be getting off to a slow start, but you wouldn't know it from Cook's confidence. He sees this as the year that defines Apple Pay. It already has hundreds of banking and retail partners, and that's just in the U.S. market.

Cook noted during the conference call that a day doesn't go by that he's not hearing from an overseas company wanting in on Apple Pay. It remains to be seen when Apple will take the financial platform global, or even if it plans to make it available outside of Apple mobile devices.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.