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Apple rockets to most profitable quarter ever

January 25, 2010 7:25:28 PM PST
Cupertino-based Apple reported an all-time record Monday for quarterly revenue and profits, based on soaring sales of its computers and iPhone. Apple's first quarter 2010, revenue was $15.68 billion. Profits were $3.38 billion.

Apple can credit a number of factors for its soaring sales. On the cost side, the global recession kept prices for components inside its products down. On the revenue side, overseas sales are soaring, up 40 percent in places like Italy and France, up 70 percent in Australia and up 100 percent in China. Apple is riding a wave of popularity that defies the frugality of a down economy.

Apple products are not cheap and its customers do not hold back. Sales at Apple stores jumped 13 percent in its Christmas quarter compared to a year ago. Mac computer sales soared 33 percent compared to the same year-ago quarter and sales of the iPhone doubled.

That gives the company the kind of cash flow and profits to take risks.

On Wednesday, apple is widely expected to unveil a new tablet device. Everyone has been trying to guess how it will look.

Windows-based tablets are in use by hospitals and by law enforcement today, but they have not caught on as consumer products.

Hewlett Packard has a tablet in the works, too. It has a touch screen and no keyboard.

Back in 1991, Apple created an early tablet, called the Newton, which flopped.

Other companies have made laptops with a screen that becomes a tablet.

Apple user Matt Steigerwald says he wants one if that is what Apple is doing.

"The idea being able to hold it instead of having it slide off my lap, having something I could hold onto and write with a stylus or even touch-screen with my fingers, that would be really convenient for me," he said.

Apple did not invent the mp3 player, but the iPod now has a 70 percent share of the market. It has turned the iPhone and iPod touch into entertainment devices.

A tablet aimed at consumers could usher in a new era.

"These types of tablets, whether they come from Apple or anybody else, have the potential of being a platform to deliver what we call the next generation of multimedia books, newspapers and magazines," Creative Strategies analyst Tim Bajarin said. "So instead of having just a newspaper with text, it would have potentially, not only color images, but also video or animation when they're trying to explain a story."

Apple CEO Steve Jobs was not part of the company's earnings call Monday. He is likely preparing to unveil the new products on Wednesday morning.


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