Apple profits ripen - despite iPad disappointment

The electronics giant has had another hugely impressive quarter - even without its glorious leader at the helm.

by Emma Haslett
Last Updated: 14 Jun 2011
Steve Jobs’ first full quarter of sick leave from Apple doesn’t seem to have slowed the company’s growth: it's just had another bumper quarter, sprinting past analyst expectations to post net profits of $5.99bn (£3.6bn), a none-too-shabby 95% up on the $3bn it made this time last year. Revenue growth was similarly impressive, up 83% to $24.67bn – way beyond Wall Street expectations of $23.3bn. And all of this, despite the fact that iPad sales were disappointing…

Yes, you read that right: iPad sales fell short of the expected ‘6m to 8m’, racking up a mere 4.69m units sold (which, admittedly, is a figure some manufacturers can only dream of). But Apple says there isn’t too much cause for concern: to begin with, it’s selling them as fast as it can make them, which suggests that the only problem is the fact that Apple didn’t anticipate demand very well. That's not great planning on its part – but there are worse problems you can have, right?

By contrast, iPhone sales jumped by a whopping 113%, to 18.65m. That's partly because in the US, Verizon Wireless became the second mobile operator to sell iPhones, after AT&T. And Apple pulled off a similar trick in countries like South Korea and Saudi Arabia, bringing its total to 186 operators in 90 countries. But once the frenzy from new customers on those networks dies down, iPhone sales might begin to flatten out a bit too. At least until the next generation model comes along.

And while sales seem unaffected this quarter, there are signs that the events in Japan will begin to have an effect later this year. Chief operating officer Tim Cook, who has taken the helm while Jobs is on sick leave, warned that revenues in the third quarter could be reduced by $200m if factories manufacturing vital components remain closed. ‘We have to caution everyone that the situation remains uncertain,’ he said, cautiously.

But generally, it's good news all round for Apple – unless, of course, you count the discovery, made by two data security experts, that the iPhone tracks its owner’s every location and stores the information in a hidden file on the phone. Apparently, with the right software, you can create a rather natty map showing exactly where you’ve been over a specified period of time. Cue much grumbling about security and prvacy - but will it derail the iPhone's non-stop growth? We can't see it.

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