Computer and smartphone maker Apple has reported its
first quarterly drop in profits in a decade, but said it will raise dividends
for shareholders.
It made a net profit of $9.5bn (£6.2bn) in the January
to March quarter, down from $11.6bn last year.
But the results were better than many had expected, as
strong iPhone and iPad sales boosted revenues to $43.6bn.
Concerns over slowing demand for its products amid
increased competition have hurt Apple's share price recently.
"Though we've achieved a credible scale and
financial success, we acknowledge that our growth rate has slowed and our
margins have decreased from the exceptionally high level we experienced in
2012," Tim Cook, chief executive of Apple said.
The company said it sold 37.4 million iPhones and 19.5
million iPads worldwide in the three-month period.
'Very
frustrating'
Although Apple continues to remain a dominant player
in the tablet computer and smartphone markets, investors have been worried that
its market share was being eroded by increasingly popular offerings from rivals
such as Samsung.
There have also been concerns over
the lack of new product launches.
Analysts have suggested the company
needs to innovate and develop new products to stay ahead of the competition,
rather than relying on updates to existing products.
"The market is tired of the
same old thing at Apple,'' said Lauren Balter, an analyst at Oracle Investment
Research.
"Investors are looking for
innovation. The reality is that people are looking at other products now and
they are looking at other cool features from competitors.''
These concerns have seen investors
ditch Apple shares over the past few months. It has lost around 40% of its
stock market value since hitting an all-time high in September last year.
However, Apple's chief executive
tried to assure investors and shareholders that the firm was continuing to take
measures to ensure that it maintained its dominance in the market.
"The decline in Apple's stock
price over the last couple of quarters has been very frustrating for all of
us... but we'll continue to do what we do best,'' he said.
"The most important objective
for Apple will always be creating innovative products.
"Our teams are hard at work on
some amazing new hardware, software and services, and we are very excited about
the products in our pipeline," he added.
Some analysts said that the lack of
a new product did not mean that the firm was not developing one.
"What no investor can see is what is happening
between closed doors in research and development,'' said David Tan, assistant
professor of strategy at Georgetown University.
"[Research and development] is always very
secretive. It always takes a very long time between the inception of an idea
and commercialising a product.''
Shares rise
Apple, which before the latest earnings had $137bn in
cash, has been under pressure to share some of it with shareholders.
On Tuesday the company said it planned to buy back
$60bn in shares, and raise its dividend to shareholders by 15%.
The move encouraged investors and Apple's shares rose
5.5% in after-hours trading on Wall Street.
Sources :
http://www.bbc.co.uk/news/business-22274324
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