Apple Inc surpassed US$700 in late trading yesterday after announcing record first-day orders for the latest iPhone, fueling optimism that the company would keep generating the revenue growth that transformed it from a niche computer manufacturer into the world’s most valuable business.
Shares climbed as high as US$701.79 after reaching a record US$699.78 at the close in New York. The stock has advanced 73 percent this year. Apple crossed the US$600 thresholda in July, after passing US$500 in February and US$400 last year.
The iPhone 5, which features a bigger screen, faster chip and a lighter body, sold 2 million units in first-day orders, more than double a record set by the previous model, Apple said.
Since its 2007 debut, the device has become Apple’s top-selling product, accounting for about two-thirds of profit. Signs of robust demand reinforced expectations that Apple will withstand accelerating competition from Samsung Electronics Co and Google Inc in the US$219.1 billion smartphone market.
Apple’s surge gathered steam on Friday, after it began taking orders for iPhone 5. Apple’s Web site said new orders would not ship until Sept. 28, a week after the handset is due in stores, an indication that supply may be running thin.
“The initial batch is sold out,” Sterne Agee & Leach Inc analyst Shaw Wu said in an interview.
He raised his sales estimate for the quarter ending this month to 26 million units, from 23 million, saying: “We think that could turn out to be conservative.”
Apple surpassed Exxon Mobil Corp to become the biggest company in the world by market capitalization last year after overtaking Microsoft Corp as the most valuable technology provider in 2010.
IPhone sales last quarter alone reached US$16.2 billion, 33 percent higher than Google’s total and almost as much as Microsoft Corp’s US$18.1 billion in revenue.
As many as 58 million units of the iPhone 5 may sell by the end of the year, according the average estimate of analysts surveyed by Bloomberg. That could generate as much as US$36.2 billion in sales for Apple.
Share gains in coming months will hinge on the success of future products, such as a smaller version of the iPad tablet, which according to people with knowledge of the matter will be released next month. Apple is also trying to make headway with products that let users view TV shows and movies on Apple devices. However, the company has struggled to come to terms with communications providers over how products will be crafted, and media companies have been reluctant to cede control over content and customer relationships.
“That may be a tough market for them,” Morris Capital Advisors chief investment officer Dan Morris said.