The technology industry has long understood that selling devices is one thing and selling things to people who own those devices is quite another. Apple's fiscal third-quarter earnings, reported Thursday, suggest the company has mastered both.

Apple said its services division, which includes advertising along with the App Store, Apple Music, and AppleCare, reached $30.7 billion in revenue for the quarter ended in June, a record for that period and a 12 percent increase from a year earlier. Advertising was cited as a key growth driver, though the company did not break out specific figures for its ad business.

"We set records in every category," Kevan Parekh, Apple's chief financial officer, said during the company's earnings call. The list of records, Mr. Parekh noted, included advertising, the App Store, AppleCare, Apple Music, and Apple TV Plus, along with all-time highs in cloud and payment services.

The services total fell slightly short of analyst estimates of $31.2 billion, a miss that might matter more if the company were not also reporting a 22 percent increase in iPhone sales and total revenue of $109.42 billion. (One imagines the finance team will survive the disappointment.)

For advertisers, the more salient number may be the 2.5 billion active devices Apple now claims, each one a potential surface for the company's growing — if still somewhat opaque — advertising ambitions. Apple also said it had surpassed 1.5 billion paid subscriptions, with double-digit growth in emerging markets.

The earnings call also served as something of a valedictory for Tim Cook, who is scheduled to step down as chief executive on September 1 after 15 years, moving to the role of executive chairman. John Ternus, currently the head of hardware engineering, will succeed him.

Mr. Cook used the occasion to discuss Apple Intelligence, the company's approach to artificial intelligence, which relies more heavily on device-based processing than on the vast data centers being built by competitors like Google and Microsoft. "The power can come from the devices and Apple's chips," he told CNBC.

Whether that architectural choice will prove to be vision or limitation is, for now, a question the company seems content to leave unanswered.

Original story published in MediaPost: "Apple Reports Record Ad Gains"