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What a tumultuous quarter. Steve Jobs died. Profits Rise 85%, 17m iPhone sold and resurrected via 4S, record Mac sales. By analysts are still not happy.

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It was the first earnings call without the legend that was co-founder Steve Jobs, but “his spirit will forever be the foundation of Apple,” said Apple CEO Tim Cook as he reassured investors at today conference call.

So on to the hard business – Apple’s growth in bulging at the seams – with revenue of $28.27 billion, net profit of $6.62bn, a phenomenal 85% jump compared to 2010, although a dip on previous quarter $7.31bn.

However, despite the y-o-y rise, Apple’s latest results fell below some analyst predictions for the first time since 2004.

Gross margin also grew 40.3 percent compared to 36.9 % in the year-ago quarter.

The iKing sold 17.07m iPhones to September 24th – a 21% growth compared to a year ago but a 16% drop on last quarter (which saw 20.34 m sales) –   so does not include the jaw dropping 4 million iPhone 4S units sold last weekend.

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iPhone 4 sales were down during the second half of the quarter due to “rumours” about a impeding new release, Apple admitted, showing how the cult around the iPhone can come back to bite it in the backside.

But it also looks like Apple has become a victim of its own success with market watchers, expecting higher and more record smashing sales each quarter that passes.

Some analysts were less than pleased with iPhone sales figures, which fell below expectations placed at 20 million. After hours share trading fell as much as 6% in the US yesterday following the announcement. 

“The numbers came in weak. They need to set records every time they report to keep up the momentum,” said Colin Gillis, analyst at BGC Partners. Analysts also put several question to Cook and Peter Oppenheimer, Apple’s CFO.

However, others dismissed this negativity: “We don’t think this is a slowdown in [market] share gains, it’s a pause,” said Brian Marshall, ISI Group analyst.

However, Cook said he was “confident” iPhone sales will break new records in the next quarter. Sales still doubled in Asia Pacific.

Apple are also looking to “eat into” the phone market (that’s you, Nokia) and are on a domination trail, where they hope every consumer will be clutching iPhones in the near future.

But it also has its eye on the business market (that’s you, BlackBerry) with Tim Cook pointing out its penetration into Fortune 500 companies including L’Oreal, Royal Bank Scotland and SAP.

And iPhone has become the top selling smartphones in the U.S., accounting for 27% of such sales in the first half of 2011, according to the IDC.

However, here in Oz, Samsung enjoyed the highest smartphone sales in August, according to new figures.

Apple also sold 11.12 million iPads during its fourth quarter, a 166 percent jump compared to a year ago.

But Mac is also on the ascent selling 4.89m  devices during the quarter, a 26% hike on a year ago. And 25% of these Mac customers were to people who had never owned the device before, Cook revealed.

And Asia Pacific, which includes Australia, was the best performing region for Macs, with a whopping 61% y-o-y growth.

But its not Aussies Apple have got their eagle eye on – it’s China, which is its second most important market outside its native US.

“Everything we’re doing in the US, we’re now doing in China.”Cook declared,”the skies the limit.”

 

Brazil Rusia and the Middle East are also looking promising, Cook said.

Its newly opened Hong Kong and Greater China stores (6 in total) saw the highest foot fall in the the globe – with 77.5m visitors traipsing through its stores.

Apple in China is “growing at a feverish pace” describing progress as “amazing.”

Apple now has 6 stores in the greater China region and opened its online store less than a year ago. It also has over 200 Apple resellers positioned to nab the new middle-class disposable yens. 

On the tabs front, a category which Apple eked out 18 months ago with the iPad launch, has been “even greater than we thought,” selling 40 m devices in total.

And it will eclipse the PC market soon, Apple Chief believes, also referring to the “cannibalisation” of Mac by iPad.
Users are drawn to the ease of use and mobility of the tab.

“I still believe it will be larger than the PC market,” and will be “a huge opportunity for Apple over time,” with several more countries not yet iPadded still on its hit list, Cook added.

And like the iPhone, its hegemony is pretty well covered: 97% of web usage on tablets in the US is on iPads, according to ComScore stats.

But is not just Nokia and Blackberry Apple seems to have in its sights: Cook also referred to the cannibalisation of Microsoft Windows by the Mac and iPad, where “more people are likely to buy a Mac than a Windows PC.”

Apple sold 6.62 million iPods, a 27 percent unit decline but accounts for 70% of all MP3s sold, Apple claim. Touch accounted for half all iPod sales.

“We are extremely pleased with our record September quarter revenue and earnings and with cash generation of $5.4 billion during the quarter,” Oppenheimer said.

But with all this cannibalisation, what are Apple doing  with all their cash? We’re not tight but we don’t want to do anything sill with it, Cook said.

Cupertino has spent funds buying a cache of patents, new stores builds and product innovations.

“What we’ve got in the pipeline is unbelievable” he said. (iPad  3 perhaps?)

“We are thrilled with the very strong finish of an outstanding fiscal 2011, growing annual revenue to $108 billion and growing earnings to $26 billion.”

“Customer response to iPhone 4S has been fantastic, we have strong momentum going into the holiday season, and we remain really enthusiastic about our product pipeline.”

 

“In out wildest dreams we couldn’t have got off to this start for iPhone 4S,” Cook declared, referring to 4 million 4S sales enjoyed over the weekend. 

And it looks like the canibalisation won’t be stopping any time soon.

“Looking ahead to the first fiscal quarter of 2012, which will span 14 weeks rather than 13, we expect revenue of about $37 billion and we expect diluted earnings per share of about $9.30.”

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