Relief for Cook as $6.9bn Apple profit beats expectations

Since Tim Cook took over at Apple, analysts have scrutinised his every move, casting doubts on whether he will be able to follow in the footsteps of his messiah-like predecessor - specificaly, whether he  will be able to come up with a new product as revolutionary as the iPhone.

For now, at least, the pressure is off: shares in the technology firm rose nearly 5% in after-hours trading after it reported a $6.9bn (£4.5bn) profit for the three months to June. Admittedly, that’s down 22% on the same time last year – but it’s still above analysts’ expectations.

The company said the fall was mainly down to its increasingly squeezed margins: they fell from 42.8% last year to 36.98% this year, with average sales prices dropping from $608 a year ago to $581.

Revenue, though, was better than expected at $35.3bn, up from $35bn this time last year.

According to the company, it sold 31.2 million iPhones (compared with 26 million this time last year), 14.6 million iPads (down from 17 million last year) and 3.8 million Macs (also down, from 4 million last year). This was partly driven by a 4% fall in Chinese sales. According to research firm IDC, Chinese consumers are becoming increasingly attracted to cheaper smartphones – apparently 66% of smartphones sold in the country next year will cost less than $200. Which puts Apple at a disadvantage.

So Cook’s ability to spark a new consumer gadget craze will still be under the spotlight. The last major innovation was the iPad, which was launched in 2010 – although Cook insists that new products are on their way.

‘We are laser-focused and working hard on some amazing new products that we will introduce in the fall,’ he said.

Given the rumours that the ‘amazing new product’ in question is a watch, MT doesn’t want to have to be the one to say the clock is ticking…