Luca Maestri
Senior Vice President and Chief Financial Officer at Apple
Thank you, Tim, and good afternoon everyone. We are very pleased to report record financial results for the December quarter. We set an all-time revenue record of $123.9 billion, an 11% increase from a year ago. We reached new all-time records in the Americas, Europe, Greater China and the rest of Asia Pacific. And it was also an all-time record quarter for both products and services.
On the product side, revenue was $104.4 billion, up 9% over a year ago, despite significant supply constraints. We grew in each of our product categories except iPad, where supply constraints were particularly pronounced and set all-time records for iPhone, Mac and Wearables, Home and Accessories.
The strong level of sales performance, the unmatched loyalty of our customers and the strength of our ecosystem have driven our current installed base of active devices to a new all-time record of 1.8 billion devices. The growth in the installed base was broad based as we set all-time records in each major product category and in each geographic segment. Our services set an all-time revenue record of $19.5 billion, up 24% over a year ago with December quarter records in every geographic segment.
Company gross margin was 43.8%, up 160 basis points from last quarter, due to volume leverage and favorable mix, partially offset by higher cost structures. Products gross margin was 38.4%, up 410 basis points sequentially, driven by leverage and mix. Services gross margin was 72.4%, up 190 basis points sequentially, mainly due to a different mix.
Net income of $34.6 billion and diluted earnings per share of $2.10 both grew more than 20% year-over-year and were all time records, operating cash flow of $47 billion was also an all-time record.
Let me get into more detail for each of our revenue categories. iPhone revenue grew 9% year-over-year to an all-time record of $71.6 billion, despite supply constraints. Thanks for remarkable customer response to our new iPhone 13 family. We set all-time records in both developed and emerging markets reached new all-time high in the iPhone Active installed base and the latest survey of US consumers from 451 Research indicates iPhone customer satisfaction of 98%.
For Mac revenue of $10.9 billion was an all-time record with growth of 25% year-over-year, driven by strong demand for our newly redesigned MacBook Pro powered by M1, despite supply constraints. We are one year into our transition to Apple silicon and already the vast majority of our Mac sales are from M1 powered devices, which helped drive a record number of upgraders during the December quarter. Our momentum in this category is very impressive. As the last six quarters have been the best six quarters ever for Mac.
IPad generated $7.2 billion in revenue, down 14% year-over-year, due to very significant supply constraints, but customer demand was very strong across all models. Despite, the supply shortages our installed base of iPads reached a new all-time high during the quarter, thanks to a high number of customers that they are new to iPad in fact around half of the customers purchasing an iPad during the quarter were new to the product.
Wearables Home and Accessories set a new all-time record of $14.7 billion, up 13% year-over-year and we set all-time revenue records in each geographic segment. We also continue to improve and expand our product offerings in this category to create unique experiences showcasing our deep integration of hardware, software and services. In addition to an outstanding level of sales performance globally Apple Watch continues to extend its reach with over two-thirds of customers purchasing an Apple Watch during the quarter being new to the product.
Turning to services. As I mentioned, we reached an all-time revenue record of $19.5 billion, up 24% with all-time records for cloud services, for music, video, advertising and payment services and a December quarter record for the App Store. These impressive results reflect the positive momentum we are seeing on many fronts. First, as I mentioned before, our installed base has continued to grow and has reached an all time high across each geographic segment and major product category.
Next, we continue to see increased customer engagement with our services. The number of paid accounts on our digital content stores grew double-digits and reached a new all-time high during December quarter in every geographic segment. Also paid subscriptions continue to show very strong growth. We now have more than 785 million paid subscriptions across the services on our platform, which is up [Technical Issues] $165 million during the last 12-months alone.
And finally, we're adding new services that we think our customers will love and we continue to improve the breadth and quality of our current service offerings. Just in this last quarter, we have added incredible new content on Apple TV Plus, on Fitness Plus and Apple Arcade in a brand new way to listen to music with Apple Music voice. We also announced in November, the beta program for Apple business essentials, a new service offering that brings together device management 24/7 support and iCloud storage to help small businesses, manage the end-to-end lifecycle of their employees Apple devices. We are very excited the many 1,000s of small business customers are already actively participating in the beta program.
This announcement is just one of many ways we are expanding our support for enterprise and business customers. With the latest MacBook Pro's that we've introduced last October, the new M1 Powered Mac lineup has quickly become the preferred choice of Macs among enterprise customers. Shopify for example is upgrading its entire global workforce to M1 Powered MacBook Pro and MacBook Air. By standardizing on M1 Max Shopify continue it's commitment to providing the best tools to help its employees work productively and securely from anywhere. And the Lloyd Consulting is expanding the deployment of the Mac Employee Choice Program, including offering the new M1 MacBook Pro to empower their professionals to choose devices that work best for them in delivering consulting services.
Let me now turn to our cash position, due to our strong operating performance and holiday quarter seasonality, we ended the quarter with $203 billion in cash plus marketable securities, we decreased commercial paper of $1 billion, leaving us with total debt of $123 billion. As a result, net cash was $80 billion at the end of the quarter. Our business continues to generate very strong cash flow and we were able to return nearly $27 billion to shareholders during the December quarter. This included $3.7 billion in dividends and equivalents and $14.4 billion through open market repurchases from 93 million Apple shares.
Our business continues to generate very strong cash flow and we are also able to return nearly $27 billion to shareholders during the December quarter. This included $3.7 billion in dividends and equivalents and $14.4 billion through open market repurchases of 93 million Apple shares. We also began $6 billion accelerated share repurchase program in November, resulting in the initial delivery and retirement of 30 million shares.
As we move ahead into the March quarter, I'd like to review our outlook, which includes the types of forward-looking information that Tejas referred to, at the beginning of the call. Given the continued uncertainty around the world in the near-term, we are not providing revenue guidance, but we are sharing some directional insights based on the assumption that the COVID-related impacts to our business do not worsen from what we are projecting today for the current quarter.
We expect to achieve solid year-over-year revenue growth and set a March quarter revenue record, despite significant supply constraints, which we estimate to be less than what we experienced during the December quarter. We expect our revenue growth rate to decelerate from the December quarter, primarily due to two factors: first, during the March quarter a year ago we grew revenue by 54%. Remember that last year we launched our new iPhones during the December quarter, while this year we launched them during the September quarter. Due to the later launch a year ago some of the associated channel inventory feel occurred during the March quarter last year. As a result of the different launch timing, we will face a more challenging year-over-year compare.
Second, we expect foreign exchange to be a 3 point headwind when compared to the December quarter growth rate. We currently expect FX to have a negative impact on growth of 2 points in the March quarter, while we represented a 1 point benefit during the December quarter. Specifically related to services, we expect to grow strong double-digits, but decelerate from the December quarter performance. This is due to a more challenging compare because a higher level of lockdowns around the world last year led to increased usage of digital content and services.
We expect gross margin to be between 42.5% and 43.5%. We expect opex to be between $12.5 billion and $12.7 billion. We expect OI&E to be around negative $150 million, excluding any potential impact from the mark-to-market of minority investments and our tax rate to be around 16%.
Finally, today, our Board of Directors has declared a cash dividend of $0.22 per share of common stock, payable on February 10th, 2022 to shareholders of record as of February 7th 2022.
And with that let's open the call to questions.
