Apple announces record profits

Tim Cook
Apple CEO Tim Cook. Source: Apple

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28 January 2015 | 0

Apple reported revenue of $74.6 billion for the quarter ending 27 December 2014, up from $57.6 billion a year earlier.

Sales of iPhones came in at a record 74.5 million units and provided more than two-thirds of Apple’s revenue, at $51.1 billion. That was up from 51 million iPhones and $32.5 billion revenue a year earlier.

Last quarter was the first full quarter that the iPhone 6 was available. Apple doesn’t break down its sales by model, but Cook said the iPhone 6 was the top seller.

Revenue from China increased by 70% to $16.1 billion, and sales outside the US accounted for 65% of revenue.

Mac sales were another highlight. The systems brought in a record $6.9 billion, up from $6.4 billion a year earlier. The company sold 5.5 million Macs, up from 4.8 million.

A bleak spot was iPad sales, which have been in decline for the past three quarters. Apple sold 21 million tablets, down from 26 million in its first fiscal quarter of 2014. Revenue from the iPad was $8.9 billion, compared to $11.5 billion a year earlier.

“I believe over the long arc of time the iPad is a great business,” Cook said, adding that “there’s probably some level of cannibalisation going on with the Mac on one side and the phone on the other.”

The iPhone 6 features a larger screen than previous models, and the MacBook Air is lighter than traditional laptops, features that give the devices some of the mobility of a tablet.

Upgrade cycles
Another factor contributing to declining iPad sales, according to Cook: a longer upgrade cycle for tablets compared with iPhones and Macs.

Apple’s attempt to establish a greater presence in the enterprise market, an area where it has struggled to gain acceptance, may change the iPad’s fortunes.

In July, IBM announced it would sell Apple products and services to its enterprise customers. The first results of the partnership appeared in December, when the companies unveiled a suite of mobile apps aimed at specific industries. During Tuesday’s call, Cook said that 12 apps will debut this quarter, including some targeted at new markets like healthcare and energy.

Apple products are used in many businesses, but only a small percentage of workers at those companies use iPads, said Cook. IBM’s experience dealing with business users, and Apple’s mobility background, could change that situation.

“The real opportunity is to bring mobility into the enterprise. To do that, you obviously need apps that are written for specific jobs. IBM provides us with knowledge of the verticals,” he said.

Income for the quarter was $18 billion, up from $13.1 billion in the same quarter last year. Earnings per share came in at $3.06 compared with $2.07 a year earlier.

The company’s revenue and profit also beat financial analysts’ expectations. Analysts polled by Thomson Reuters had called for revenue of $67.7 billion and earnings per share of $2.60.

Fred O’Connor, IDG News Service

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