Strong global sales of mobile devices have lifted Apple to record-breaking revenue in its first quarter, with the Chinese market performing particularly well, but there is still room for rivals if they build up their developer ecosystems
Apple sold more than twice as many iPads and iPhones from October to December than in the same quarter a year ago, helping drive a massive increase in profit.
Strong global sales of mobile devices have lifted Apple to record-breaking revenue in its first quarter.Image credit: CNET UK
The company sold more than 37 million iPhones and 15.4 million iPad tablets during the 14-week period ending 31 December, Apple said in its earnings release on Tuesday. It reported net profit of $13.06bn (£8.4bn) in the fiscal first quarter, up from $6bn the year before. Total revenue rose 73 percent to $46.4bn. By comparison, Google reported revenue of $10.58bn for the same quarter.
"We were thrilled with the 37 million iPhones that we sold," Apple chief executive Tim Cook said on an investor conference call. "We would attribute it to a breathtaking customer reception of the iPhone 4S with iOS 5, and key features such as Siri and this incredible camera with advanced optics. Customers are absolutely loving this product."
The iPhone 4S, which went on sale during in October, gave the company its best-performing launch of any iPhone to date, Cook said.
Despite the record performance and the company's "strength in virtually every key region", Apple could have sold more iPhones but was hampered by a lack of supply in some areas, he added. Sales of the handset in China were "particularly huge", he noted, given that the iPhone 4S was being sold only via resellers and online, and not in retail stores, during the quarter.
"We felt we were betting bold [in China], as I think many of you would have thought, if you [had] what we were doing," Cook said. "But as it turns out, we didn't bet high enough."
Apple performed similarly well with its iPad range, posting a 111-percent increase on the 7.33 million sold in the first quarter of 2011.
The success is not just about the strong brand, it is about making products successful by caring for the detail.– Carolina Milanesi, Gartner
"The success is not just about the strong brand, it is about making products successful by caring for the detail. Apple gives you a new device type, the iPad, and they bring it to life with 170 million apps," Carolina Milanesi, mobile device analyst at Gartner, told ZDNet UK.
"Many industry watchers like to compare Apple and Samsung's results at a high level," she added. "Not many point out that Apple can do 37 million units in a quarter with one product that has an average selling price of close to $600. That is just not something that other vendors can do."
The company's Mac laptops also showed strong revenue growth of 26 percent. While it saw only a 12-percent increase in revenue across its desktop lines, Milanesi believes this will not be a cause of concern.
"Desktops are being impacted by the move to mobile — be it the Pro or the Air line — but this is to be expected. I am not sure that Apple is particularly worried about this. Nor are they worried about the iPad impacting their PC business, as iPad is impacting more the Microsoft PC business than their own," she said.
On the call, Cook revealed Apple has sold more than 315 million iOS devices (including iPod Touch units) since it introduced the platform. He assured investors it will keep working on the mobile operating system to counter the challenge from Android and others.
"iOS is doing extremely well. I wouldn't say it's two-horse race. There's a horse in Redmond that always suits up and always runs, and will keep running. And there's other players that we can never count out. So what we focus on is innovating," Cook said.
"We'll just keep on doing that and somewhat ignore how many horses there are," he added.
Milanesi believes Windows Phone and Android will have an uphill struggle to attract developers in numbers to a point where they can take on Apple.
"In order for other OSes to be successful there is a lot that needs to come together, from vendors focusing on overall ecosystem — not just hardware — to operators that start differentiating their data plans, reflecting more the real cost of the hardware," she said.
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