Apple defies skeptics, posts solid Q1

Before Apple announced its latest financial results, there were naysayers suggesting that sales of the iPhone 5 were weak and that the Cupertino-based giant had lost its way. They were wrong.

Number One Infinite Loop posted quarterly revenue of US$54.5-billion and quarterly net profit of US$13.1-billion. Both, claims Apple, were records. In the same quarter a year ago, the company posted US$46.3-billion and net profit of US$13.1-billion. It’s worth noting however that this quarter was a week shorter than that of a year ago.

The source of the skepticism around Apple’s results probably resulted from news a couple of weeks ago that it was halving orders for iPhone 5 displays. People saw this as a sign that the much-hyped device wasn’t selling all that well. The truth, it seems, was very different. The company sold 47.8-million iPhones in the quarter, compared to 37-million in the same quarter a year ago. Yes, it’s true that demand would have risen for the cheaper iPhone 4 and 4S, but a device that sold more than three-million units on opening weekend isn’t likely to struggle and suggesting that something happening on the supply chain is due to a fall in demand is complete speculation.

In the earnings call, Apple CEO Tim Cook took time out to put pay to these rumours of the company’s demise:

“I’d recommend questioning the accuracy of any kind of rumour about build plans,” Cook said. “I’d also stress that even if a particular data point were to be factual it would be impossible to interpret what it really means to our business. Our supply chain is very complex and we have multiple sources for our components. Yields can vary, supplier performance can vary. There’s just a long list of things that would make any single data point not a great proxy for what’s going on.”

iPad sales were also up meanwhile with Apple shifting 22.9-million of the tablets, compared to 15.4-million in the year-ago quarter.

This quarter’s results however also reflect a wider slow down in the desktop computing market. Apple sold 4.1-million Macs, compared to 5.2-million a year ago.

The product that turned Apples fortunes around in the early 2000s meanwhile continued its descent into irrelevance. Apple sold 12.7-million iPods in the quarter, compared to 15.4 million a year ago.

“We’re thrilled with record revenue of over US$54 billion and sales of over 75-million iOS devices in a single quarter,” said Cook. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”