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Apple profits almost double on iPhone sales

by Scott Bicheno on 21 April 2010, 09:29

Tags: Apple (NASDAQ:AAPL)

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Device giant Apple has thrown down the gauntlet to its many would-be competitors with a record-breaking quarter. It posted revenue of $13.5 billion in the first quarter of the calendar year. This translated to a profit of $3.07 billion.

"We're thrilled to report our best non-holiday quarter ever, with revenues up 49 percent and profits up 90 percent," said Steve Jobs, Apple's CEO. "We've launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year."

The bad news for the rest of the tech industry is that a lot of the growth came within the most critical, and thus competitive, sector - from the iPhone. Apple registered its highest quarter of iPhones ever, shifting 8.75 million, which represented 131 percent year-on-year growth. An interesting morsel to come out of the earnings call is that the average selling price of the iPhone is a massive $600.

And let's not forget how good Apple is at extracting maximum post-sales revenue from every iPhone sold. When you buy an iPhone you effectively buy-in to iTunes and the app store, which as well as providing Apple with revenue for every track or app sold, also ensure the cost of deserting iPhone to another smartphone platform is considerable. And let's not forget the newly-launched iAd platform.

Macs aren't doing too bad either, with the 2.94 million sold representing a 33 percent year-on-year increase. No doubt Macs continue to benefit from the halo-effect of Apple's mobile devices. On that note, Apple COO Tim Cook revealed that Apple was "shocked" at the level of demand for the iPad.

Despite these results comfortably beating the analyst consensus, Apple's shares were unmoved at time of writing; gaining a mere 0.35 percent in after-hours trading. It could be that UK chip designer ARM, which provides some of the IP inside both the iPhone and iPad chips, benefitted more, with its UK listing opening up over three percent this morning.

 

UPDATE - 09:50, 21 April 2010 - Scratch that comment about Apple shares; they're up five percent in pre-market trading.



HEXUS Forums :: 10 Comments

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It posted revenue of £13.5 billion in the first quarter of the calendar year. This translated to a profit of £3.07.

Only 3 quid? Me thinks there is a missing “billion”.
iPhone sales will probably get quite a good trickle down from the iPad publicity machine.

Apples marketing is utter genius, as someone who studied as an engineer the quality and choice of materials is just pants, but you have to hand it to them, jobs mob runs an excellent shop.

The downside is the share price is a bit high by standard measures, the cash pile is a bit worrying for many institutionals as was the under performance of the iPad compared to some analysists.

The apple PR machine often works against the city which thrives on correct information!
kingpotnoodle
Only 3 quid? Me thinks there is a missing “billion”.

Thanks, got the currency wrong too, sigh. :angst:
Scott B;1910566
Thanks, got the currency wrong too, sigh. :angst:

One of those days Scott? Nevermind, we've all had them :)

I feel that Apple are doing well with they're usual mark-up on products, but they could be doing better.

Imagine if they came to market with a scaled down iphone which was good enough for most of the day-to-day stuff, but the price came in at the 100-150 handset price range on PAYG.

Can you imagine the amount of sales overnight these devices would have as kids would want one if they've used their parents phone or seen one from a friend.

There you go Steve (Jobs not the hexus one!), a bit of insight on which market to try to dominate next :)
There is a lot of sheep out there….