Apple's iPhone rockets quarterly earnings by 95% to $6bn
Revenue also up by 83% as number of iPhones sold more than doubles from a year ago – but iPad sales stutter
Apple's quarterly earnings have shot up by 95%, largely thanks to iPhone sales. Photograph: Yuriko Nakao / Reuters/REUTERS
Apple's quarterly earnings grew by 95% to $6bn (£3.65bn) and revenue by 83% to $24.7bn compared with the year-ago quarter, but sales of itsiPad tablet stuttered to just 4.7m after a huge Christmas rush in the previous quarter.
However, the number of iPhones sold, 18.6m, more than doubled from the 8.75m a year ago, and also maintained quarter-on-quarter growth from the 16.2m sold in the last three months of 2010, suggesting that demand for the company's phone remains strong and is still growing.
Tim Cook, the chief operating officer, who is in charge while chief executive, Steve Jobs, is on medical leave, said the earthquake and tsunami in Japan would cut revenues by $200m in the current quarter but that there was no disruption at all to the company's supply chain after Apple moved quickly to secure it. "We don't expect any effects, but the situation remains unpredictable," he said.
Of Jobs, Cook said: "We see him on a regular basis and he continues to be involved in major strategic decisions, and I know he wants to be back full time as soon as he can."
He added that despite the numbers for iPads in the quarter just ended, present demand was "staggering" and that it was being rolled out to many more countries. "We sold every one that we could make."
The company's vulnerability to seasonal demand, and the public's expectation that it would update its iPad early in the year, meant that revenues and profits were slightly lower than the previous quarter covering the Christmas period.
However, Fred Oppenheimer, the chief financial officer, said the launch in mid-March of the revised iPad 2 had seen a huge boost in demand: "We're thrilled with its momentum," he said. "We sold every iPad 2 that we could make and would have liked to have more."
The iPhone generated $12.3bn of revenue, up 126% on the year before, at an average selling price of $660, up from $620 a year ago, helped by rapid sales growth in the US of 155% as it started to be sold on Verizon, the largest mobile carrier in the country, along with AT&T, which reported strong results earlier on Wednesday.
Sales of the iPod music player, once the barnstorming driver of Apple's growth, continued to fall both in annual and quarterly comparisons, to 9m, down 17% year-on-year, having peaked in the Christmas period of 2008.
The $6.40 per-share earnings figures beat professional analysts' estimates by nearly $1, 19% higher than forecasts of $5.37. Analysts had also expected that iPhone sales would barely budge compared to the previous quarter.
Oppenheimer and Cook suggested that the iPad will see rocketing sales in the current quarter, despite the comparatively disappointing numbers in the quarter just ended. "Demand has been staggering," Cook said. "I'm still amazed that we're heavily backlogged. However, I'm extremely pleased with the manufacturing ramp. I'm confident that we can produce a large number of iPads in this quarter." He was unsure, however, whether that would be sufficient to meet demand.
Apple's products are being challenged more broadly by products using Google's free Android operating system in both smartphones and tablets. In smartphones, Android is reckoned to have the largest share worldwide, though tablets struggle to compete with the iPad.
Cook said that he felt "very, very good" about Apple's future products compared with Android, and added that "our business proposition is very strong – iPhone's integrated approach is materially better than Android's fragmented approach".
Oppenheimer pointed to the large proportion of Fortune 500 companies testing the iPhone and iPad, saying this showed corporate acceptance of the devices.
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