Apple profits jumped 47 per cent on surging iPhone and Macintosh computer sales in the latest quarter, capping a remarkable boom year for a company whose rivals were lucky to tread water.
Although Google and other tech companies have recently reported strong results or an improved outlook, raising optimism in the sector, none have outstripped expectations as markedly as Apple.
The company defied the consumer recession as unit sales of iPhones rose 7 per cent and Macintosh computer shipments jumped 17 per cent in the quarter ending in late September.
Overall profit increased to a record $1.67bn, or $1.82 a share, from $1.14bn or $1.26 a share, shattering the Wall Street consensus forecast of $1.42. Apple shares rose 5.5 per cent to $200.35 in early Wall Street trading on Tuesday, having hit a a record $207 in after-hours trading on Monday.
Analysts said they saw no reason for a slowdown in Apple’s momentum, which drove annual profit up 18 per cent to $5.7bn. The company is launching the iPhone in China and is allying with additional wireless carriers in the UK and elsewhere. Apple is also pushing to extend the “halo” effect from the sales of iPhones to other devices.
It is expected to announce new versions of its desktop and portable computers in the next few weeks, trying to extend its market share gains by reaching consumers uncertain about upgrading to Microsoft’s new Windows 7 operating system.
“We’ve got a very strong line-up for the holiday season and some really great new products in the pipeline for 2010,” said Steve Jobs, Apple chief executive.
Executives would not give specifics but observers said both the all-in-one desktop iMacs that combine displays and drives and the MacBook notebooks might receive their first serious refurbishment in about two years. “There are a lot of indications that a refresh is coming,” said Yair Reiner, Oppenheimer analyst.
The lower-end MacBook’s plastic casing seemed dated, analysts said, and the new desktop computers were likely to be thinner and faster. Trade publications have reported that volume manufacturing has begun and that Apple is offering discounts to cut the number of existing models in the sales channel.
Apple has increased its minority share of the personal computing market by combining solid products with effective advertising that often takes aim at the complexity and instability of machines running Microsoft’s Windows.
Because those commercials have worked well, some analysts suspect Apple may be waiting to see the advertising that comes with Windows 7’s broad availability this Thursday. It could then launch counter-ads, perhaps focusing on the challenges of upgrading from Windows XP, which requires reinstallation of all programs.
●Texas Instruments, the second-largest US chipmaker, said customers had raised production levels in the past two quarters in a rebound from recession. Third-quarter profits of 42 cents a share on revenues of $2.88bn beat Wall Street expectations of 40 cents, on sales of $2.82bn.