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Apple sales prove underwhelming

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Apple profits up 21%

Apple’s profits have risen by a fifth in the last year – but that still wasn’t enough to satisfy investors who had been hoping for more.

In the three months to 30 June, Apple announced that net profits were up by $8.8bn (£5.7bn), which represents a 21 per cent year-on-year rise. Meanwhile, sales over the same period were up 22 per cent to £22.6bn. However, in a Thomson Reuters poll, analysts had predicted that quarterly sales would climb further to £24bn.

iPads up, iPods down

The distribution of Apple’s sales across its product range also makes for interesting reading. Sales of the iPad enjoyed a remarkable 84 per cent rise, while the number of iPhones shifted increased by 28 per cent. At the other end of the spectrum, Mac computer purchases remained largely static with a two per cent rise while demand for the iPod dropped ten per cent.

In fact, the iPhone sales figures are particularly worth noting since a much stronger performance had been predicted. David Wolfe, of investment consultancy Wedgewood Partners, explained: “What is key is the mixture between iPhone and iPad, the iPhone has higher margins. iPhone sales were lower than expected – meaningfully lower – and that translates into a big hit on the bottom line.”

Nevertheless, Apple will be confident of regaining its momentum over the coming months with a string of product launches. A revamp of the MacBook line of computers was announced recently while a new version of its operating system, OS X Mountain Lion, was unveiled alongside these results. And the iPhone 5, the latest incarnation of its iconic smartphone, has been widely tipped for a September release date.

Tom Glass, creative director at theEword, said: “To some extent, Apple has become a victim of its own success with investors demanding phenomenal levels of growth year-on-year. The only way Apple can answer its critics is by doing what it does best – designing incredible products that people are willing to pay a premium for, starting with the iPhone 5.

Written by Richard Frost

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