Apple reports £6.1bn profits, but announces stock buybacks as iPad underperforms

By Peter Gothard
24 Apr 2014 View Comments

Apple has revealed profits of $10.2bn (£6.1bn) for its first quarter of 2014, a period in which it shipped 43.7 million iPhones, up 17 per cent compared to Q1 2013 but down 14 per cent from last quarter.

The company also announced another stock buyback scheme, increasing the value of shares it will buy back from last year's $60bn to $90bn.

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Apple's board of directors also announced a seven-for-one stock split, giving each shareholder at Apple, from June 2014, six more shares for every share they hold.

In its quarterly statement, Apple maintained that the Macs it designs are "the best personal computers in the world". But Cupertino should perhaps be concerned that the most exciting news coming out of its curved walls right now is that it's improving its options for shareholders. The iPod has fallen in popularity by 54 per cent compared to last quarter while, more seriously, the iPad has missed even the conservative estimates laid out by analysts.

Apple was expected to sell 19.7 million iPads, while in reality it sold only 16.35 million. The iPhone's 43.7 million sales did, however, fairly trounce the forecast of 37.7 million.

Nevertheless, CEO Tim Cook announced that Apple is "very proud" of these quarterly results.

"Especially our strong iPhone sales and record revenue from services," said Cook.

"We're eagerly looking forward to introducing more new products and services that only Apple could bring to market."

Precisely what these products might be remains the vaguely tired ongoing debate within the IT industry.

Apple didn't take the opportunity to follow up rumours about its supposed ‘serious' break into mobile digital payments, and beyond this, the industry is left only with word of ‘iWatches' and other me-too consumer goods.

Steve Jobs' ‘walled garden' front-to-back hardware and software environment could only remain a popular option if technology users were given ongoing reasons to remain within that ecosystem. The iPad in particular has suffered from a lack of development since Android-based systems proliferated, with Google's suite of cloud-based productivity tools more than making up for hardware that can appear cheap and cheerful.

Even Microsoft is catching up, with sales of Windows 8-based tablets experiencing a surge last Christmas. Microsoft also alleged, during its Build conference this year, that it was outselling Apple in its mobile app store.

Apple may need to start exploring ways to make the iPad a more ‘useful' device, with better multi-tasking and content creation, if it is to return to the spectacular success it enjoyed a few years ago.

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