Surge in iPhone sales rings well with investors

Friday, 26 July 2013 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Apple Inc shares opened about 5% higher on Wednesday after the technology company’s third-quarter profit beat analysts’ expectations due to stellar sales of its iPhones. The world’s largest technology company said it sold 31.2 million iPhones in the quarter, far more than the expected 26 million, easing concerns that growing competition is hurting demand for its smartphones.

Higher sales of older phone models drove sales numbers in the quarter as Apple aggressively cut prices for the older iPhone 4 in emerging markets before phasing it out, Susquehanna Financial Group analyst Chris Caso wrote in a note. Many analysts have not updated their outlook on Apple stock, preferring to wait for the expected launch of iPhone 5S and a low-end iPhone later this year before updating their views. A sharp drop in Apple’s China revenue in the second quarter underscores the challenges it faces as cheaper local rivals close the technology gap, threatening demand in the company’s second-largest market. Along with a lower-priced iPhone some analysts want to see a new line of product from the company to complement its phones and tablets. After smartphones, a watch-like wrist gadget is considered a potential new battleground between Apple and rival Samsung Electronics Co. Apple has applied for a trademark for “iWatch” in Japan. Apple shares, which have lost about 18% in market value in the last six months, closed at $418.99 on the Nasdaq on Tuesday.