Apple profits top estimates

Shares of computer and smartphone maker Apple rose nearly 5% in after-hours trading after it reported better-than-expected profits for the third quarter, BBC News reported.


It made $6.9bn (£4.5bn) profit for three months to June, thanks in part to good sales of its iPhone smartphone.


Apple said it sold 31.2 million iPhones, a record for the June quarter, compared to 26 million last year.


But profit was down 22% from the same period a year earlier as its profit margins shrank to 36.98% from 42.8%.


However, average sale prices were lower at $581, compared with $608 a year ago.


Its revenue was also better than expected, with the company earning $35.3bn, although that was barely above the $35bn of a year ago.


Analysts said the data, especially on iPhone sales, may help allay some fears of a slowdown in Apple's growth rate.


"The iPhone number should provide some comfort to investors who were worried about smartphone demand," said Shannon Cross of Cross Research.


"That's one of the reasons the stock is up. Expectations were not strong for this quarter."


One of the brakes on the robust pace of growth that Apple has enjoyed in recent years has been the growing popularity of rivals such as Samsung - which has now become the world's biggest mobile phone maker - as well as the launch of low-cost smartphone by Chinese manufacturers.


According to its latest numbers, Apple's sales in China were also down by 4% in the April to June period.
Research firm IDC has estimated that 66% of the 385 million smartphones sold in China next year will cost less than $200 - significantly less than the cost of Apple's iPhone.


That has led some investors to fear that Apple may have to cut the price of its products in an attempt to attract customers.


At the same time, sales of its the iPad tablet computer, fell by 14% to 14.6 million units, compared with 17 million a year ago.