Apple rides high but iPad falters

Steve Dinneen
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Apple last night smashed expectations to post record fourth quarter profits and revenues, boosted by blockbuster sales of its new iPhone 4.

However, its landmark iPad tablet device lagged behind analyst forecasts as supply issues continued to dog the world’s biggest technology firm.

Apple shifted 4.2m iPads in the quarter, falling well short of analyst predictions of up to 5m.

Steve Jobs’ firm now faces stiff competition in the tablet market, with rivals RIM and Samsung both having released credible alternatives in recent months.

Jobs attempted to pour cold water on the iPad’s rivals, claiming their smaller size meant they fell short of both a smartphone’s convenience and an iPad’s functionality.

But Apple’s stock still tumbled more than six per cent in after hours trading on news of the iPad’s disappointing sales.

However, sales of its new iPhone 4 helped push the firm’s quarterly revenue up 67 per cent to $20.3bn (£13bn), ahead of Wall Street’s target of $18.9bn. And it reported profits of $4.31bn, up from $2.53bn a year ago. Both figures are a record for the fourth quarter.

The firm shifted 14.1m iPhones in the period, and the Cupertino-based firm is now activating 275,000 iPhones every day. This compares to 200,000 phones a day being activated using Google’s rival Android software, according to the search giant’s latest figures.

The battle is key to both firms’ plans to control the way we view the mobile internet, one of the fastest growing and most lucrative technology markets.

Apple sold 9m iPods, boosted by a completely redesigned range of products, as well as
3.9m of its high-margin Mac laptop and desktop computers.

It has now reported record revenues and profits for every quarter since 2007, before the onset of the recession – a remarkable feat for a firm specialising in high-end products.

The latest revenue figures are an astonishing five times higher than the equivalent figure in 2005, with earnings rising 10 times in the same period.

Apple now expects its first quarter revenue – traditionally its strongest – to hit $23bn as customers rush to buy its products in time for Christmas.

Meanwhile, IBM reported a higher-than-expected profit and raised its outlook for the year. Its quarterly profit rose to $3.6bn on revenue of $24.3bn. It was buoyed by strong sales in its core hardware business but was hit by sluggish trading in technology services.