Apple's profit more than doubles on blazing sales of iPhones
Revenue from the iPhone and iPad — neither of which could be bought five years ago — now accounts for 72 percent of Apple's total revenue.
The New York Times
It turns out Apple didn't need an iPhone 5 to bolster sales.
The company reported Tuesday that its profit for the holiday quarter more than doubled. And that was largely thanks to gangbuster sales of the iPhone 4S, which, when introduced in October, was greeted with grumbling from pundits and some users for lacking the razzle-dazzle of what an iPhone 5 might bring.
But consumers still came out in droves to buy the 4S, helping the company sell more than double the number of iPhones for the quarter ended Dec. 31 than it did a year ago, a figure that was also lifted by sales of older models of Apple's phone.
With the 37 million iPhones that customers snapped up over the holidays, Apple has sold 183 million of the devices since the product went on sale in 2007.
Underscoring the transformation of the company, revenue from the iPhone and iPad — neither of which could be bought five years ago — now accounts for 72 percent of Apple's total revenue.
And although phones based on Google's Android operating system had been gaining more customers in recent years, Apple has begun to chip away at some of the advantages of these phones, narrowing Android's lead in the United States over the holidays.
In a conference call with Wall Street analysts, CEO Tim Cook described the customer response to the new iPhone as "breathtaking" and said the company could not meet global demand despite producing a record number of iPhones.
"As it turns out, we didn't bet high enough," Cook said.
The supporting act in Apple's product lineup — the iPad — also had a record quarter, with 15.4 million of the tablet devices sold over the holidays, more than double the number sold a year earlier.
After watching rivals stumble for the last two years, Apple faced its first credible competition in the tablet category this fall when Amazon introduced the Kindle Fire.
The $199 device from the Seattle-based Internet retailer is significantly cheaper than the $499 starting price for the iPad.
Cook said iPad sales were not hurt by Amazon's Kindle products, which have less computing power and lack features like cameras for now.
"Customers will buy those, and they'll sell a fair number of units," he said. "But I don't think people who want iPads will settle for limited functions."
The rosy results sent Apple shares soaring 8 percent in after-hours trading. The jump increased the total value of Apple's shares to more than $426 billion, pushing its market value past that of ExxonMobil and making it the world's most highly valued company.
Cupertino, Calif.-based Apple said its profit for the period rose 118 percent to $13.06 billion, or $13.87 a share, compared with profit of $6 billion, or $6.43 a share, a year earlier.
Revenue rose 73 percent to $46.33 billion, from $26.74 billion a year ago.
Apple's results were inflated slightly because its 2011 holiday quarter included 14 weeks of sales, rather than the 13 weeks in 2010, due to a change by the company.
The results were better than the $10.08 a share in earnings and $38.85 billion in revenue expected by analysts, according to a survey by Thomson Reuters.
"It almost defies words in terms of the strength across all products," said Toni Sacconaghi, an analyst at Sanford C. Bernstein. "Everything about it eclipsed even the wildest expectations of analysts."
Apple said it sold 5.2 million Macintoshes during the holiday quarter, 26 percent more than it did a year earlier.
Apple's cash and securities ballooned to nearly $100 billion, an eye-popping sum that is likely to revive calls for Apple to return some of the hoard to investors in the form of stock buybacks and dividends.
Peter Oppenheimer, Apple's chief financial officer, told analysts that the company and its board of directors are "actively discussing" uses of the cash, including potential acquisitions and further investments in the company's supply chain.
"We're not letting it burn a hole in our pockets," he said.