Apple profits and iPhone sales up, but iPad demand down

Increased demand for iPhones from China helps to boost Apple profits by 12 per cent compared with previous year

iPhone and iPad producer Apple has posted its latest quarterly results, with strong sales of smartphones and Mac computers driving profit up to $7.75bn (£4.5bn) - a rise in 12 per cent compared with the same period for 2013.

That rise in profits comes despite a drop in demand for iPad tablets, which for the second quarter in a row saw sales fall, this time dropping nine per cent to 13.3 million, with business and consumer awareness of other, often cheaper, tablet devices from Android or Microsoft likely to have played a role in this.

However, the drop in iPad sales shouldn't represent any cause for concern for Apple, which has seen unprecedented growth in iPhone demand in countries like Brazil, Russia, India, South Africa and China. Indeed, iPhone demand in the latter has risen by 48 per cent, suggesting that China will be a key market for Apple as the company moves forward.

"Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters," said said Apple CEO Tim Cook.

"We are incredibly excited about the upcoming releases of iOS 8 and OS X Yosemite, as well as other new products and services that we can't wait to introduce."

"We generated $10.3bn in cash flow from operations and returned over $8bn in cash to shareholders through dividends and share repurchases during the June quarter," added Apple CFO Luca Maestri.

"We have now taken action on over $74bn of our $130bn capital return program with six quarters remaining to its completion."

Apple is expected to once again release a new iPhone in September this year. This time, it's thought the new iPhone will come equipped with a bigger screen, with reports that Apple has ordered almost 80 million large-screen builds of its smartphone.

If the figures are correct, it represents the largest initial production run for an Apple product and suggests Apple is confident there will be demand for the new iPhone in both new and existing markets.