Apple reports record profits as recession fails to bite

A 100% increase in iPhone sales helps Apple enjoy its best ever quarter. So where does it go from here?

Last Updated: 31 Aug 2010

The iPhone juggernaut rolls on: a two-fold increase in sales of Apple’s trendy handset helped the tech giant nearly double profits last quarter. Apple has just reported a 32% increase in revenues for the three months to December (including the lucrative Christmas trading period) to $15.68bn (£9.7bn), with profits soaring 49% to $3.38bn (£2.08bn). That’s the best quarter in its 34-year history – and it’s even making inroads into the corporate market. Apple boss Steve Jobs will be hoping that the launch of his new tablet computer – the worst kept secret in the tech world – can maintain this momentum. But is there a danger of Apple products becoming too popular?

Not even a recession can keep us away from ‘must-have’ gadgets, it would seem. Despite the continuing spending squeeze, Apple managed to flog 8.7m iPhones throughout the world in the last quarter, which is almost double what it sold in the same period a year ago. Not all of this increase was down to young trendies – the iPhone is apparently getting a lot more popular with business users too. But it wasn’t just phones flying off the shelves: the company also sold a record number of its sleek Mac computers, shifting 3.36m units – mostly laptops – as sales increased by a third.

Sceptics will point out the results were boosted by a new accounting standard that records revenue at the point of sale, rather than being deferred over the life of products, as it has been traditionally. Also, while a 100% increase in iPhone sales may sound pretty impressive to most us, it was actually slightly lower than some analysts were predicting. Meanwhile, sales of the iPod continued to fall, down by 8% on the same period last year. But this was hardly unexpected: after all, who needs an iPod when you have an all-singing, all-dancing iPhone?

Apple fans are currently waiting with baited breath for the launch of this much-vaunted tablet computer, which will apparently be unveiled in San Francisco tomorrow morning – although in typical Apple style, the launch is shrouded in secrecy, with even the product name still under wraps. Analysts reckon the product – widely thought to be a cross between an iPod Touch and a MacBook – could sell around 2m units in its first year, although they also warn it might cannibalise sales of iPhones and iMacs. As Apple says, we’ll have to ‘stay tuned’ to find out.

But for Jobs, there may be a greater worry: once every man and his dog own some kind of Apple product, will they stop being cool?

In today's bulletin:

The recession is over - or is it?
Apple reports record profits as recession fails to bite
Tough road ahead for Jaguar Land Rover after Smith's surprise exit
Employees can't get no satisfaction, says CIPD
How the public sector has been propping up the UK economy

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