Apple cashes in as millions buy iPhones

Apple said its net income rose 47 per cent in the most recent quarter as more people bought Mac computers and gave in to the iPhone craze.

The results sent Apple shares surging 7 per cent in extended trading overnight to an all-time high.

Apple unveiled a faster iPhone in June and cut the price of the previous generation of the phone to $99 (£60) in the USA. That boosted iPhone sales from July through September to 7.4 million devices, half a million more than in the same period of 2008.

Apple weathered the economic meltdown better than other computer companies, giving it a running start when PC sales grew in the quarter. Apple had also updated its Mac operating system and refreshed its Macbook Pro line. Apple sold 3.1 million Macs, a 19 per cent rise from the same period a year ago.

As Apple's iPhone, which has iPod features built in, has grown in popularity, Apple's regular iPod music player business has suffered. The company sold 10.2 million iPods in the quarter, 8 per cent fewer than last year, even though Apple unveiled a new iPod Nano with a video camera in September.

The iPod Touch was the bright spot in the media player lineup. Revenue for the gadget, which is like an iPhone without the phone, doubled from a year ago, Apple Chief Financial Officer Peter Oppenheimer said in an interview.

Apple said it earned $1.7 billion (£1 billion), $1.82 per share, in its fiscal fourth quarter, which ended 26 September. Revenue jumped 25 per cent to $9.9 billion.

For the entire 2009 year, Apple said its profit rose 18 per cent to $5.7 billion (£3.4 billion), or $5.36 per share. Revenue climbed 13 per cent to $36.5 billion.

For the current quarter, Apple said it expects to earn $1.70 to $1.78 per share, well below the $1.91 that analysts are expecting, though the company traditionally gives extremely conservative guidance. Apple predicted revenue of $11.3 billion (£6.8 billion) to $11.6 billion (£7 billion), while analysts are looking for $11.4 billion (£6.93 billion), according to a Thomson Reuters poll.

Wall Street shrugged off the profit guidance and sent the company's shares up $13.38, or 7.1 per cent, to $203.24 in extended trading. The shares had closed regular trading at $189.86, up 1 per cent on the day.