Apple defies downturn with record sales

Apple shrugged off the econiomic gloom and reported record revenue and profit during its financial first quarter on the strength of solid laptop, iPod, and iPhone sales.


Apple shrugged off the econiomic gloom and reported record revenue and profit during its financial first quarter on the strength of solid laptop, iPod, and iPhone sales.

For the first time in its history, Apple tallied more than $10 billion revenue, reporting sales of $10.17 billion for the three months ended 31 December.

That’s up 6 per cent from the revenue of $9.6 billion Apple recorded during the year-ago quarter.

The company reported a $1.61 billion profit, up 2 per cent from last year.

Apple earned $1.78 per diluted share, up from $1.76 a year ago and ahead of analyst expectations.

Analysts polled by Thomson First Call expected revenues of $9.75 billion and $1.39 per diluted share.

Apple’s first-quarter performance was also a far cry from the challenging picture the company painted in October, when chief financial officer Peter Oppenheimer told analysts that the company was expecting earnings of $1.06 to $1.35 a share on revenue ranging from $9 billion to $10 billion.

“We entered the holiday season with our best product line-up ever and our customers responded,” Oppenheimer said on Wednesday.

Strong laptop sales fueled a record quarter for Mac sales, the sixth time Apple has set a quarterly sales record in the last seven quarters.

The company said it sold more than 2.5 million Macs, a 9-per cent jump in unit growth from last year’s first quarter.

Much of that growth came from the laptop segment, where sales grew to 1.79 million units from 1.342 million portables in the year-ago quarter.

Apple introduced an overhauled MacBook line in October—which executives said was a major factor in the record Mac sales.

“Customer response to the new MacBooks and MacBook Pros was strong,” Oppenheimer told analysts.

However, Apple also reported a steep decline in desktop sales, which fell to 728,00 units from 977,000 in the year-ago quarter.

Oppenheimer said the year-ago figure was inflated by the August 2007 launch of the Penryn-based iMac and that gap reflects a shift toward notebooks in the overall market.

However, it’s been some time since Apple updated its desktop offerings—the iMac last saw an update in the spring of 2008 while the Mac Pro and Mac mini lines have been unchanged since January 2008 and August 2007, respectively.

Laptops accounted for 71 per cent of the Macs sold by Apple during the fiscal first quarter.

The laptop line’s share of Apple’s sales had been around 60 to 62 per cent in recent quarters.

In a conference call with Wall Street analysts to break down the results, Oppenheimer and chief operating officer Tim Cook fielded questions about netbooks—compact, lightweight portable computers with a low price tag.

Apple has remained out of the netbook market, and, based on comments made by Cook Wednesday, continues to be unimpressed by what other companies are offering.

“From our point of view, those products are based on hardware that’s much less powerful than what we think that customers want, software quality that is not good, cramped keyboards, small displays,” Cook said.

“So we don’t think people are going to be pleased with those products, but we’ll see.”

Cook added that Apple continues to watch the netbook market and has “some ideas” about it.

The Macs weren’t the only product line to see record sales for the quarter. Apple also sold a record number of iPods, after introducing changes to the line of portable music players in September.

For the quarter, Apple sold 22.7 million iPods, up three per cent from last year’s record total. Encompassing the holiday shopping season, Apple’s fiscal first quarter tends to see a large number of iPod sold.

However, the trend of slowing sales growth continued—in last year’s first quarter, Apple reported a 5 per cent increase in unit sales.

Oppenheimer said that Apple enjoyed a market share topping 70 per cent for MP3 players in December, according to figures from NPD Group.

Apple recorded recognised revenue of $1.25 billion, compared to $241 million in the year-ago quarter.

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