Tech giant Apple has seen its profits fall for the first time in a decade, however the company reported that sales of its iPhones and iPads remain strong.
It announced that its profits for the three months to the end of March 2013 – were down $2.1bn to $9.56bn, but strong sales helped boost revenues to $43.6bn.
Higher component prices, lower costs of some of its products and stronger competition in the marketplace are thought to be behind the reduction in profit margins.
Apple has seen a 40 per cent drop in its stock value since September last year but it is not all grim news for the tech giant:
- it sold 37.4m iPhones in the quarter, compared to 35.1m in the same period a year before
- it also sold 19.5m iPads, compared to 11.8m in the year before however it
- sold just under 4m Macs, compared to 4m in the same quarter a year ago.
Apple’s CEO Tim Cook said: “We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad.
“Our teams are hard at work on some amazing new hardware, software, and services and we are very excited about the products in our pipeline.”
However markets reacted favorably to the news as Apple’s share price leapt 5.5 per cent in after-hours trading.
Although nobody can doubt that Apple remains a dominant player in the tablet and smartphone markets, its dominance is being challenged by strong products from rivals, most noticeably from Samsung.
Apple has also been criticised for being slow to innovate and to develop new products to stay ahead of the market and is being seen to be content to rely on updates to existing products to drive new sales.
The company also announced plans to buy back $60bn in shares, and raise its dividend to shareholders by 15%. That encouraged investors and Apple’s shares rose 5.5% in after-hours trading on Wall Street.
Via: Sky News