Apple’s profit rose by a massive 78% during the three months to December, with the tech giant announcing it sold 16.2 million iPhones and over seven million iPads during the period.
But the impressive results have not silenced questions over the state of chief executive Steve Jobs’ health and the company’s succession plans.
During today’s analyst briefing, Apple executives declined to expand on yesterday’s announcement that Jobs will take an indefinite leave of absence due to heath reasons, or discuss any type of succession planning. .
The closest chief operating officer Tim Cook came to mentioning any type of succession planning was when he said Apple’s management team is “all very happy with the product pipeline”.
Apple chief financial officer Peter Oppenheimer also took the opportunity to dismiss competition from Android tablets, calling many of them “bizarre”.
The financial results represent another record-breaking quarter for Apple: net profit of $US6 billion, or $US6.43 a share, which beats the previous record by $US1.7 billion. Revenue was up more than 70% to $US26.74 billion.
Among the more noteworthy announcements were that Apple sold 4.13 million Macs, which represents 23% growth from the same time last year. It also sold over 7.3 million iPads, representing a 75% increase from the previous quarter, and 16.24 million iPhones.
iPod Touch sales now account for over 50% of iPod sales, and grew by 27% over the year. Overall iPod sales have dropped by two million due to the decline of the dedicated MP3 player device.
The iTunes Store brought in $US1.1 billion in revenue, while $US10.47 million came from the sale of iPhones and iPhone accessories – which is now available in 90 countries on 185 carriers. More revenue is expected from iPhone sales now the device is available from US carrier Verizon.
Overall, there were 160 million iOS devices sold in the quarter. The Apple Retail stores brought in revenue of $US3.85 billion, with 323 stores worldwide. The stores have a gross margin of 38.5%, which dropped from above 40% but was still above guidance.
Total cash reserves were up 8.7% to $US59.7 billion.
Oppenheimer also mentioned the company has entered a two-year, $3.9 billion deal with three suppliers to secure a “very strategic” component for some of its products. Analysts have already pointed out this could be for the high-resolution displays rumoured for iPads and iPod Touch devices.
In a statement, Jobs said that “we had a phenomenal holiday quarter with record Mac, iPhone and iPad sales”.
“We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on.”
In a post-announcement conference call with analysts, executives addressed some other issues – but no questions were put to the company regarding Jobs’ health or the company’s succession plan.
Oppenheimer noted the shortage of iPhones, saying that “we would love to make more” but is constrained by demand.
Cook also addressed the issue of cannibalisation – that iPad sales are now beginning to take away sales from Macs.
“Honestly, I don’t know for sure…but I think there is some cannibalisation. But if this is cannibalisation, it feels pretty good.”
However, the most interesting comment of the day was made when Cook took the opportunity to address the growing number of tablet competitors on the market. Android tablets are coming thick and fast, and over 100 gadgets where just revealed at CES.
But Cook dismissed them, saying “there’s not much out there, as you know”.
“There are two kinds of groups today (in the market). [There are] the ones using a Windows-based operating system. They’re big, heavy and expensive. Weak battery life, and from our point of view, customers aren’t interested in that.”
“Then you have the Android tablets. The variety shipping today, the OS wasn’t designed for a tablet. So you wind up having the size of a tablet that’s less than reasonable, or one that’s not even a real tablet experience. It’s a scaled-up smartphone – that’s a bizarre product in our view.”
Cook said the next-generation of Android tablets are just “vapour”, and that there isn’t much concern. But he also said Apple isn’t sitting still and has “a huge first-mover advantage”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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