Just over three years after Steve Jobs' death, Apple (AAPL) has shown it can thrive without its founder at the helm. In recent weeks it has unveiled new iPhones, iPads and Macs and marked its entry into the mobile payments and wearable markets with Apple Pay and Apple Watch. And its finances are far from shabby - sales for the quarter ended September 27 rose 12 per cent to $42.1bn (£26.1bn), while full-year EPS was up 13 per cent.
The iPhone has been paramount to Apple's success. The group sold more than 10m iPhone 6 and iPhone 6 Plus devices during their launch weekend, and is struggling to keep up with demand despite software glitches and bending concerns. Moreover, iPhone unit sales rose 16 per cent to 39.3m last quarter and should rise further as the new devices are rolled out worldwide. And the average selling price of the iPhone was up 4 per cent from the preceding quarter at nearly $603, helping the group to slightly widen its gross margin to 38 per cent.
The iPhone's enduring appeal has had other benefits. Downloads from Apple's App Store have surged 42 per cent to 85bn in the past year, driving a 36 per cent rise in sales last quarter. But the new, larger-screen versions of Apple's flagship smartphone may further cannibalise the iPad - unit sales fell for a third consecutive quarter by 13 per cent to 12.3m. However, that could reflect a longer upgrade cycle.
Apple's gains haven't come cheaply, with full-year research and development costs up 35 per cent to $70.5bn. But it expects to reap the rewards during the critical Christmas quarter with sales forecast to rise as much as 15 per cent to $66.5bn. That may encourage Apple to return more of its $155bn cash pile to shareholders - it spent around $20bn on share buy-backs and dividends last quarter.
Broker Cantor Fitzgerald expects operating income of $59.7bn in 2015, giving EPS of $7.60, up from $52.5bn and $6.45.
