Apple trumps expectations, sells 35m iPhones
NEW YORK (AP) — Apple Inc., the world’s most valuable company, trumped sceptics once again by reporting blowout iPhone sales.
Apple says it sold 35 million iPhones in the January-to-March quarter, almost twice as many as it sold a year ago and above analyst expectations.
Apple’s stock was down two per cent at the close of regular trading, as investors believed phone companies had reined in iPhone sales. In extended trading, the stock rallied US$40.02, or 7.1 per cent, to US$600.30.
“They’re delivering the goods much stronger than even the biggest bulls would have thought,” said Brian White, an analyst with Topeka Capital Markets. “It’s Apple fever at its finest.”
Net income in the company’s fiscal second quarter was US$11.6 billion, or US$12.30 per share. That was nearly double the net income of US$6 billion, or US$6.40 per share, a year ago.
Analysts polled by FactSet were expecting earnings of US$10.07 per share for the latest quarter, Apple’s
fiscal second.
Revenue was US$39.2 billion, up 59 per cent from a year ago. Analysts were expecting US$37 billion.
IPad sales came in below analyst expectations, at 11.8 million units. But that was still two and a half times as many as it sold in the same quarter a year ago. Apple launched a new iPad model in the quarter, and supplies are still tight. White believes short supplies of the new high-resolution screen are to blame.
Mac sales were also slightly below expectations, at 4 million. That was up seven per cent from last year. Meanwhile, the overall PC market grew about 2 per cent.
Windows PC makers are now hoping Windows 8 will give them a better chance at competing with Apple, both in PCs and tablets. Intel CEO Paul Otellini last week said he believes PCs and tablets will merge into one light device with a keyboard and a touch-sensitive screen.
Apple CEO Tim Cook dismissed that idea on a conference call with analysts Tuesday. Tablets and PCs work best as separate devices, playing to their own strengths, he said.
“You can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user,”
he said.
Cook also dismissed concerns that phone companies aren’t satisfied subsidising each new iPhone by hundreds of dollars, and are trying to curb iPhone upgrades by their subscribers. AT&T Inc’s Tuesday morning earnings report provided signs that the company is doing just that.
“IPhone is the best smartphone on the planet to entice the customer who is currently using a traditional mobile phone to upgrade to a smartphone” Cook said. “There’s a win-win-win there.”
Analyst Abhey Lamba at Mizuho Securities agreed, saying he doesn’t expect phone companies to change their subsidies any time soon.
“IPhone is selling well because consumers want it, not because carriers are pushing it,” he said.
IPhone sales accounted for 58 per cent of Apple’s revenue, more than ever. Three years ago, the figure was 27 per cent.
Keeping with the trend over the last year, Asia, and in particular China, accounted for much of the revenue growth. Sales in “Greater China,” which includes Hong Kong and Taiwan, were triple those of a year ago, and accounted for 20 per cent of Apple’s revenue.