Apple's Profit Doubles on Holiday iPhone 4S Sales - New York Times

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With the 37 million iPhones that customers snapped up over the holidays, Apple has sold 183 million of the devices since the product went on sale in 2007.

It turns out Apple didn’t need an iPhone 5 to bolster sales.

The company reported on Tuesday that its profit for the holiday quarter more than doubled largely thanks to gangbuster sales of the iPhone 4S, a product that was greeted with grumbling when it came out in October from pundits and some users for lacking the razzle-dazzle of what many imagined an iPhone 5 would look like.

But consumers still came out in droves to buy the iPhone 4S, helping the company sell more than double the number of iPhones for the quarter ending Dec. 31 than it did a year ago, a figure that was also lifted by sales of cheap, older models of Apple’s cellphone.

With the 37 million iPhones that customers snapped up over the holidays, Apple has sold 183 million of the devices since the product went on sale in 2007. Underscoring the transformation of the Cupertino, Calif., company, revenue from the iPhone and iPad â€" neither of which could be bought five years ago â€" now account for 72 percent of Apple’s total revenue.

And although phones based on Google’s Android operating system had been gaining more customers in recent years, Apple has begun to chip away at some of the advantages of these phones, narrowing Apple’s lead in the United States over the holidays.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” Timothy D. Cook, Apple’s chief executive, said in a statement. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

In the meantime, Apple said it sold 15.4 million iPads over the holidays, more than double the number it sold during the same period the year before.

After watching competitors stumble for the last two years, Apple faced its first credible competition in the tablet computer category this fall when Amazon introduced the Kindle Fire. The $199 device from the Internet retailer is significantly cheaper than the $499 starting price for the iPad and is closely linked to a variety of Amazon online offerings including its e-book store, movie and music services.

The rosy results sent Apple shares soaring 8 percent in after-hours trading.

Apple said its net income for the period rose 118 percent to $13.06 billion, or $13.87 a share, compared with net income of $6 billion, or $6.43 a share, a year earlier. Revenue rose 73 percent to $46.33 billion, from $26.74 billion a year ago. Apple’s results were inflated slightly because its 2011 holiday quarter included 14 weeks of sales, rather than the 13 weeks in 2010, due to a change by the company.

The results were better than the $10.08 a share in earnings and $38.85 billion in revenue expected by analysts, according to a survey by Thomson Reuters. Apple itself had previously forecast earnings of $9.30 a share and $37 billion for the quarter.

Apple said it sold 5.2 million Macintoshes during the holiday quarter, 26 percent more than it did a year earlier.

The performance of Apple’s iPhone business underscores how the company has thrived in the mobile phone market, even as Google steadily nibbled away at the iPhone’s share of smartphones in recent years with handsets based on the Android operating system. Not only are Android phones made by a wide array of manufacturers, they have had wider distribution on carrier networks.. The iPhone was initially limited to AT&T’s network in the United States and exclusive relationships with other carriers elsewhere in the world.

But the iPhone is now available on the three largest wireless networks in the United States, with the addition of Sprint in the fall. After it introduced the iPhone 4S in October, Apple also made its older iPhone 4 available for $99 and iPhone 3GS for free with contracts through wireless carriers. Analysts believe the move expanded the audience of potential iPhone buyers beyond people willing to spend $199 for Apple’s latest model of smartphone.

There are signs that Apple’s strategy helped narrow Android’s lead in the market over the holidays. Nielsen, the audience measurement firm, said in a recent report that 61.6 percent of United States consumers surveyed in October said they had gotten an Android phone within the last three months, while only 25.1 percent got an iPhone.

By December though, Android’s lead among people who had acquired a smartphone recently had narrowed to 46.9 percent while 44.5 percent of consumers said they got an iPhone, Nielsen said. About 57 percent of iPhone owners in December said they got the new iPhone 4S, while the remainder, 43 percent, got older models of the phone.

The iPhone 4S was initially derided by some critics for offering little improvement on the older iPhone 4, with none of the bold outward design changes that make it easy for cellphone users to brag about owning the latest Apple gizmo. On the inside though, the product has a better camera, faster microprocessor and a virtual assistant called Siri that lets people dictate texts and do Web searches with voice commands.

Apple said it expects to report earnings of $8.50 a share and revenue of about $32.5 billion during the fiscal second quarter.