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Apple posts record quarter as Jobs withdraws amid renewed health concerns

Jobs had been on medical leave since January

Apple has announced yet another record financial performance, with net profit for fiscal Q1, which ended December 25th 2010, at $6bn. Revenues also exceeded previous performances, hitting $26.74bn. The financial announcement was timed to follow the news that Apple CEO Steve Jobs, who has in the past battled pancreatic cancer and undergone a liver transplant, is to take another leave of absence due to ill health.

In an email to Apple employees, Jobs said Monday that COO Tim Cook would be taking over the day to day running of the organisation but that he would be remaining as CEO during his medical leave, and plans to “be involved in major strategic decisions for the company.”

Jobs is widely felt to be the beating heart of Apple and reactions to changes in his wellbeing affect perceptions of the company to a greater degree than would be the case for other CEOs or organisations. The Apple share price opened at $329.52 on Tuesday, down from $348.48 on Friday last week. Monday was a public holiday in the US, more evidence of careful timing on Apple’s part.

Jobs will surely be unhappy that he has to take a break from the company he said in his email he “loves so much” but he can at least take solace in the firm’s recent performance. Sales of the iPhone were up 86 per cent year on year, at 16.24 million units for the quarter. And the iconic handset’s big brother, the iPad, also performed well, with 7.33 million units shifted during the quarter. The firm’s Mac PCs were present at the party, with 4.13 million units sold, up 23 per cent on the same period in the previous year.

Malik Kamal-Saadi, principal analyst at Informa, suggested that Jobs’ absence will not materially damage the company as long as its product portfolio stays strong. “Although the financial community is nervous about Steve Jobs’ departure, consumers care more about Apple as a desirable brand and less about the popularity of Steve Jobs,” he said. “From that perspective, as long as the company continues to innovate as it has in the last few years, it will enjoy a healthy performance over the coming years. With its existing products alone, there is no doubt the company will continue to score significant sales and revenue growth in the coming years, despite the mounting competition it faces in the mobile and tablet markets.” Informa expects sales of the iPhone to approach 50 million devices in 2011 and those of the iPad to be in the range of 30 million.

No further details of Jobs health or speculation as to the length of his leave of absence were given at Apple’s results announcement.


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