Apple net profit up 70% led by latest iPhone

Apple on Monday reported record quarterly revenue led by blockbuster sales of its latest generation iPhone and took shots at rivals Google and Research In Motion.

The California-based company said that its net profit in the quarter ending September 25 soared 70 per cent to $4.31 billion on unprecedented sales of Macintosh computers, iPhones and iPads.

"We are blown away to report over $20 billion in revenue and over four billion in after-tax earnings both all-time records for Apple," said Apple chief executive Steve Jobs.

Apple reported record revenue of $20.34 billion in the fourth quarter of its fiscal year, up from 12.21 billion dollars a year ago.

Apple said it sold 3.89 million Macintosh computers during the quarter, up 27 percent from a year ago, 14.1 million iPhones, up 91 percent from a year ago, and 4.19 million iPads, up from 3.3 million the previous quarter.

Apple said it sold 9.05 million iPods during the quarter, down 11 per cent from a year ago.

Jobs said during an earnings call that iPhone "handily" outsold BlackBerry and that he didn't see the handsets made by Canada-based Research In Motion catching up any time soon.

He then took aim at Google and its Android software for mobile phones.

Jobs downplayed claims that approximately 200,000 Android mobile devices are activated daily, saying that daily activations for Apple gadgets averaged 275,000 in the past 30 days.

"We are confident our approach will triumph over Google's fragmented approach," Jobs said.

While Android touts being "open" software that handset makers can craft into devices as they wish, Apple's "closed" approach lets it control quality from the hardware to the software.

"The closed approach enables Apple to make products they believe create the best customer experience," said NPD analyst Ross Rubin. "The success they are having in the market validates that many customers believe that is true."

Jobs contended that the array of smartphone makers putting custom spins on Android software will be "a mess" for users and application makers.

Apple shares were down 6.13 per cent in after-hours trading to $298.50 as iPad sales fell short of expectations. Analysts had expected Apple to sell as many as five million iPads during the quarter.

Investors were evidently also concerned about costs and aggressive pricing eating into the money Apple makes per gadget.

Jobs remained confident, saying that he believed Apple has a "tiger by the tail" with the iPad and that there is little sign of a viable challenger.

Jobs saw only a "handful of credible entries" in the tablet market and said that most came up short because of 7-inch screens, which work out to be only 45 per cent of the area on Apple's tablet computer.

He maintained that those touch-screens are too small for great applications unless they "include sand paper so users can sand down their fingers" to tap onscreen keys.

"Seven-inch tablets are tweeners," Jobs said. "Too big to compete with a smartphone and too small to compete with an iPad."

Apple plans to build on the momentum of its Macintosh computers with an event Wednesday in San Francisco focused on refreshing the line-up in time for the year-end holiday shopping season.

"We still have a few surprises left for the remainder of this calendar year," Jobs said.

Apple ended the recent quarter with about $51 billion in its coffers and is saving the money for acquisitions or other tactical corporate moves.

"We would like to continue to keep our powder dry because we do feel there are some strategic opportunities in the future," Jobs said.

Apple revealed that it has sold about 250,000 of its new Apple TV devices since the second-generation of the gadget priced at 99 dollars became available in September.

"Clearly, it was a very strong quarter," Rubin said.

 

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