Apple Inc’s quarterly profit climbed with strong demand for iPhones, particularly in China, where the company’s revenue surged. The only damper in strong earnings reported on Tuesday was a decline in iPad tablet sales.
The California-based company posted a profit of US$7.7 billion on revenue of US$37.4 billion in the three month period to June 28, an increase of 11.6 percent from a year ago. Apple said it sold 35.2 million iPhones in the quarter, a rise of nearly 13 percent from the same period a year earlier.
“Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest [earnings per share] growth rate in seven quarters,” Apple’s chief executive Tim Cook said in an earnings release.
Apple also declared a cash dividend of US$0.47 per share of common stock to be paid at the close of business on Aug. 11.
In a disappointment, Apple said iPad sales fell 9.2 percent from a year ago to 12.27 million, a figure weaker than most analysts had expected. The soft demand for iPads also hurt revenues, which were below the consensus forecast of nearly US$38 billion.
“iPad sales met our expectations, but we realize they didn’t meet many of yours,” Cook said during an earnings call with financial analysts.
“We are very bullish about the future of the tablet market and confident that we can continue to bring significant innovation to this category,” he added.
He stuck to his belief that the tablet market would eventually surpass the PC market, saying that Apple needed to do a few things to “get it moving on a faster trajectory, and we are on track to do that.”
The earnings release, as expected, contained no hint of any new iteration of the popular iPhone despite numerous reports that Apple is preparing versions with a larger display.
“We have an incredible pipeline of new products and services that we can’t wait to show you,” Cook said in the earnings release.
A US patent made public on Tuesday bolstered rumors that Apple is planning the release of a smartwatch. The patent describes a wrist band, possibly with a touch screen, configured to connect wirelessly to a mobile device such as a smartphone.
Apple has remained tight-lipped about product plans, but Cook has stated repeatedly that impressive new products were in the works, and that he sees the wrist as a preferred spot for a wearable computing gadget.
Sales in China went well past expectations Apple had for the quarter, climbing 28 percent when compared with the same period a year earlier.
“China, honestly, was surprising to us,” Cook said.
In the US, Apple is stronger: According to the research firm eMarketer, the iPhone’s share of the smartphone market is likely to increase to 40.5 percent this year.
The research firm International Data Corp said Apple remained the largest global tablet vendor in the first quarter but that its market share slid to 32.5 percent from the 40.2 percent seen early last year.
“Has Apple lost its way? Not at all,” Forrester analyst Frank Gillett said. “I see no drama or challenges in these results.”
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