Apple profit soars

Apple's net profit in the recently-ended quarter soared as sales of iPad tablet computers nearly tripled but its stock price sank with a rare miss of expectations regarding iPhones. The iconic California company said it had a record-high September quarter profit of $6.62 billion on revenue of $28.27 billion boosted by sales of 11.12 million iPads. The enviable earnings didn't measure up to expectations Wall Street had set for Apple and the company stock price slid more than six percent to $395.35 in after-hours trading. "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," said Apple chief executive Tim Cook. "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." Apple reported that it sold 11.12 million iPads in the quarter in a 166 percent jump from the same period last year. The company saw iPhone sales rise to 17.07 million and Macintosh computer sales climb to 4.89 million in 26 and 21 percent increases, respectively, from the third fiscal quarter in 2010. Analysts had expected iPhone sales to be stronger. Sales of iPod MP3 players ebbed 27 percent to 6.62 million in a predictable decline as people increasingly rely on smartphones for video and music. Apple executives downplayed the break in iPhone sales momentum, saying rumors buzzing before the launch last week of the iPhone 4S caused people to wait to snap up the latest model. "I am confident we will set an all-time record for iPhone this quarter," Cook said during an earnings conference call. "In our wildest dreams we couldn't have gotten off to as good a start as we did with the 4S." Apple has sold more than four million iPhone 4S smartphones since it was released Friday in seven countries: the United States, Australia, Canada, France, Germany, Japan and Britain. It will be available in 22 other countries, including much of Europe, by the end of October, and more than 70 countries by the end of 2011, Apple said. Cook unveiled the 4S on October 4, one day before visionary Apple co-founder Steve Jobs died following a long battle with cancer. His health failing, Jobs had stepped down as chief executive in August and was replaced by Cook. A private memorial will be held for the late Apple leader Wednesday at the company's headquarters in Cupertino, California. Apple executives predicted iPad sales will also shatter records during the year-end holiday shopping season. Greater China has become Apple's fastest growing region, with revenue there second only to the United States. "I've never seen a country with as many people rising into the middle class that aspire to buy products Apple makes," Cook said. "The sky is the limit there." Apple is seeing "significant opportunity" as well in Brazil, Russia and the Middle East. A formidable iPad challenger has yet to arrive, according to Cook, who believes that the tablet computer market will become larger than the personal computer market. Apple has sold more than 40 million iPads since Jobs introduced the tablet early last year. Cook said iPad sales are cannibalizing desktop computer or laptop sales, but that the biggest bite is coming out of the market for machines powered by Microsoft's Windows operating systems. "We are coming out very well in the cannibalization category," Cook said, noting that Macintosh sales in the past quarter were at a record high. "With cannibalization like this, I hope it continues." He declined to comment on patent battles that Apple is fighting with makers of Android-powered smartphones and tablets in an array of courts. Cook said he would leave it to the Apple board to decide whether to break from its pattern of not paying stockholder dividends or buying back stock. "I am not religious about holding cash or not holding it," Cook said when asked if his approach to dividends would differ from that of his predecessor. "We will continually ask ourselves what is in Apple's best interest." Apple finished the quarter with slightly more than $80 billion in cash.