Emerging markets to sustain Apple's growth

Company sees 93 percent jump in second quarter net profit, and analyst predicts emerging markets, especially China, will sustain Apple's growth momentum.
Written by Liau Yun Qing, Contributor on

Apple's net profit for its second quarter 2012 reaches US$11.6 billion, marking a 93percent increase from US$6 billion in the previous year. An industry analyst says Cupertino's growth momentum will be driven by emerging markets, in particular, China.

In a statement Wednesday, Apple announced that its revenue for second-quarter 2012, ended Mar. 31, totaled US$39.2 billion--an increase from US$24.7 billion in the same quarter last year. CFO Peter Oppenheime said the company was expected to rake in revenue of about US$34 billion for this third quarter.

Some 35.1 million units of its iPhone device were sold, a 88 percent year-on-year growth, while the iPad tablet saw a 151 percent sales increase to reach 11.8 million units.

The Mac product range which includes the iMac and Macbook saw slower growth at 7 percent with 4 million units sold worldwide, said Apple. Sales of its portable music player, iPod, dipped 15 percent with 7.7 million units sold.

Emerging markets to drive Apple's growth
According to Beau Skonieczny, analyst for computing practice at Technology Business Research (TBR), the iPhone and iPad's growth was boosted in part by their rapid global rollouts. The smartphone is now available in over 100 countries including China, while the tablet device is available in over 40 countries.

"Apple is continuing to push into emerging markets, particularly China, to sustain the company's growth momentum," Skonieczny noted in a statement Wednesday. "Its success in China will be predicated on partnerships with Chinese retail businesses and mobile service providers, tapping into already existing customer bases eager for Apple devices."

The company is seeing strong growth in Asia-Pacific with a 114.1 percent revenue increase year-to-year, he noted, adding that the region represents 26 percent of Apple's total sales.

Prior to Apple's financial announcement, analysts had expressed doubts over Cupertino's ability to keep its touch in bringing industry-changing innovative products since the death of its co-founder, Steve Jobs. However, one analyst noted that current CEO Tim Cook was doing a good job.

An inspection earlier this year by Fair Labor Association (FLA) into Chinese factories operated by Foxconn, which manufactures Apple products, found "significant issues" at the plants. Some of these included excessive overtime, problems with overtime compensation, as well as several health and safety risks, saidthe labor rights watchdog.

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