Technology giant Apple records 8% Profit on iPhone Sales

                           

Technology giant Apple reported profits of $10.2bn (£6.1bn) after selling 43.7 million iPhones during the three-month period ending 29 March. Apple also announced plans to buy an additional $30bn of its stock back from shareholders and to increase its quarterly dividend by 8%. It also said it would split its stock for the first time in nine years.

The moves are meant to appease investors as the firm reports slowing revenue growth. Apple chief executive Tim Cook warned Wall Street back in January that this would be a disappointing quarter. However, in the end that pessimism proved somewhat unfounded. Even though the tech giant lacked any significant new driver to move the earnings or revenue needle, the performance of iPhone sales will silence critics who have suggested the new handsets are not innovative enough for consumers.

However, the iPad has underperformed - providing succour to suggestions to that the tablet needs to be a more capable Mac-like device if it is to replace the traditional PC and return to reinvigorated growth. If the boost to Apple's share price is to be maintained, much will depend on announcements later this year.

Quite aside from rumours of a new, bigger iPhone 6 "phablet", speculations abounds about a fitness-centric "iWatch" and a significant update to Apple TV. Typically the Silicon Valley giant has remained tight-lipped, except to signal it will "absolutely" enter new product categories soon. As the smartphone and tablet market mature, it needs to resurrect its reputation not just for incremental innovation but for outright disruption - reassuring investors that, yet again, it has the vision and strategy to execute on "the next big thing".

Shares in the firm surged more than 7% in after-hours trading, as investors also welcomed news of the seven-for-one split, which is set to take effect in June. .

Total sales of Apple's once-popular iPod music player continued to decline sharply, falling to just 2.8 million units during the second quarter - a 54% decrease from the previous three-month period.

Source: BBC