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Apple shares rise 4% on results
From: BBC          Published On: July 23, 2013, 22:56 GMT
 
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Apple shares rise 4% on results

Investors were reassured by the better-than-expected figures


Computer and smartphone maker Apple has reported slightly better-than-expected profits for the third quarter of the year.

It made $6.9bn (4.5bn) profit for three months to June, partly thanks to good sales of its iPhone smartphone.

However, the profit figure was 22% below that reported for the same period in 2012 and profit margins were also lower, down from 42.8% to 36.9%.

Despite this, the results sent its shares up 4%.

Revenue was also better than expected, with the company earning $35.3bn, although that was barely above the $35bn of a year ago.

Lost lead

Sales of its iPhone, which was launched six years ago, also encouraged investors, with 31.2 million being sold, a 20% increase and a record for the period.

Average sale prices were down, however, at $581, compared with $608 a year ago.

Its newest product, the iPad tablet computer, saw sales fall by a sharp 14% to 14.6 million, compared with 17 million a year ago.

Sales in China were also down by 4%, where Apple has been hurt by competition from lower-cost phones.

Research firm IDC has estimated that 66% of the 385 million smartphones sold in China next year will cost less than $200 - significantly less than the cost of Apple's iPhone.

Apple has spent most of the past 10 years as the darling of consumers and investors.

But a lack of new products - its last innovation was the iPad in 2010 - has seen faith in it wane, and strong competition from South Korea's Samsung in particular, has also eaten into its lead.

Apple's boss. Tim Cook, promised that would change soon.

"We are laser-focused and working hard on some amazing new products that we will introduce in the fall [autumn] and across 2014," he said.

'Mojo'
The results were the second quarter in a row that the technology giant's earnings had been below those of the previous year.

Early reaction from company analysts was mixed.

"It's nice to see Apple get a little mojo back," Colin Gillis, senior technology analyst at BGC Partners, told the BBC.

Mr Gillis was cheered by higher than expected sales of the iPhone, although he found Mr Cook's management lacking.

"There's a gaping hole in the product refresh that has happened in 2013," noted Mr Gills, which he said was "an unprofessional thing to do by management".

Cheaper

Others were less sanguine about Apple's surprisingly strong iPhone numbers.

"They are keeping sales going by pushing the lower end products which cost less," said Jefferies technology analyst Peter Misek.

Mr Misek said he believes the market for Apple's higher-end products like iPads is saturated.

He added Mr Cook's comments confirmed late autumn product launches, which many analysts had been expecting.

Adam Sarhan, chief executive of Sarhan Capital, New York, was also unimpressed, telling Reuters: "This was a 'blah' quarter and the story hasn't changed.

"Until it delivers a new, innovative product that really adds to both top and bottom-line, I would expect the stock to continue treading water."


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