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Investors should have been paying attention to Buckingham Palace. When even Her Majesty has an iPod – a gift of the visiting American president – it should have been clear that Apple’s electronic gadgets have become profoundly popular. So in the midst of recession, the technology company coolly breezed past expectations, with sales growth of 9 per cent in the second quarter of 2009. Shares in the group on Thursday continued a rally that leaves them 60 per cent above their January low.

That even grandmothers are listening to podcasts on shiny Apple gadgets explains part of the strong showing, with 11m iPods shipped in the quarter and almost 4m iPhones. Gross margins improved, too, thanks to lower component costs and a larger contribution from software sales.

There was one niggle. Shipments of Mac computers fell 3 per cent year on year, with notebook sales dropping for the first time in more than six years. While consumer appetite for Apple kit appears solid, professional demand for the highest-specification devices has weakened sharply. So average selling prices continue to fall at an accelerating pace. They were down 13 per cent in the first quarter. The risk is that this starts to offset the margin benefit Apple gets from selling more iPhones.

Even so, it is tempting to start believing in the Apple growth story again. The sale of software through the company’s online App store – rapidly approaching its billionth download – has reinvigorated sales of the most expensive touchscreen iPod while also boosting the iPhone’s appeal. More products are anticipated this summer – one potential debutant is a small tablet to compete in the cheap netbook market. Much of that is captured in a valuation that, at 23 times prospective earnings, leaves no room for disappointment. But with the iPhone still in its infancy, and the ranks of Apple lovers growing, there are few companies that can match its appeal.

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