Apple bucks recession trend with record sales and profits
The California company has posted a 46% increase in quarterly profits, thanks to its best ever sales of iPhones and computers Apple has surprised Wall Street by announcing record breaking sales and profits, as the Californian technology company continues to defy the recession. Thanks to the highest ever sales of its iPhone handsets and Mac computers, Apple posted profits of $1.67bn (£1bn) for the last three months, based on sales of almost $10bn (£6bn). That marks a 46% increase in profit over the same period last year, when the company made $1.14bn (£695m) on revenues of $7.9bn (£4.8bn). Its chief executive, Steve Jobs, who returned to the company earlier this summer after a six month break to undergo a liver transplant, said he was "thrilled" with the results and had more plans to excite customers in the near future. "We've got a very strong lineup for the holiday season and some great new products in the pipeline for 2010," he said. Those products are rumoured to include a new touchscreen computer that the company hopes can capitalise on the iPhone's success. A string of reports suggests that the company may be preparing to launch a so-called "tablet" machine in the new year. In recent months, Apple has consistently defied predictions that the recession would stifle consumers' appetite for its high-cost products. It exceeded expectations by selling 7.4m iPhones and 3.05m computers worldwide during the past three months – sales that mean 46% of Apple's business is now outside the US. "Apple PCs and Apple phones are more expensive," said Jane Snorek, an analyst with First American Funds. "Clearly, right now the consumer doesn't care: for some reason, consumers will spend more money to get Apple." The only area of the company's business that is not bucking the recessionary trend is its iPod line – which saw an 8% decline in year on year sales, down to 10.2m in the three months ending on 26 September. However, analysts said that was largely due to some consumers switching to the iPhone - which is more profitable for the company, thanks to monthly mobile phone subscriptions. Part of Apple's astonishing growth has been thanks to the widening reach of the iPhone, which is now on sale in more than 40 countries - as well as Apple's back-to-school push to encourage students to buy its desktop computers and laptops. Staff at the company's headquarters in Cupertino, California, will also be buoyed by sales of its most recent computer operating system, Snow Leopard. In particular, the news of Macintosh sales will give them a boost since it comes just as Microsoft prepares to release a new version of its Windows software on Thursday. The company's numbers significantly beat Wall Street's already-high expectations of how the Californian computer pioneer would perform, pushing its shares up more than 6% to $202 in after-hours trading – a historic high. The company has been a long-term favourite for many investors, thanks to almost uninterrupted growth since the iPod first became a major mainstream hit around 2004. Despite this expansion, however, Apple continues to surprise by shrugging off almost all the negatives trends set in the wider economy - and even those set by its rivals the technology sector.
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Apple bucks recession trend with record sales and profits
Sharing in a crisis | Bobbie Johnson
Co-working, where small companies office share space and expertise, is a growing trend in Silicon Valley now that even Google is laying off workers, writes Bobbie Johnson When walking through Sandbox Suites , a small office just south of San Francisco's City Hall, you would be forgiven for thinking that it was a business much like any other. It has a reception desk, a dainty little kitchen and comfortable sofas where workers sit chatting with each other or making phone calls. Even the inhabitants seem typical of a company in the city: software engineers, web developers, designers and an accountant. The difference only comes when you realise that none of the people who come here every day actually works with each other.
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Sharing in a crisis | Bobbie Johnson
Fujitsu to cut 1,200 UK jobs
• Job losses account for almost 10% of Fujitsu's UK workforce • Move follows loss of contracts and company-wide pay freeze Japanese IT group Fujitsu is axing 1,200 jobs, almost 10% of its UK workforce, as the recession sees corporate clients and public organisations try to conserve their cash. The company, which has a number of contracts with government departments including the Ministry of Defence, employs 12,500 people in more than two dozen offices including its corporate headquarters in London. While the losses are expected to be spread across the country its largest office is in Bracknell, Berkshire, which has 1,240 staff, with 750 people based in Manchester and 670 in Stevenage, Hertfordshire. "Fujitsu has proposed this measure reluctantly," the company said in a statement. "However, action is necessary to ensure that the company remains competitive in the current difficult global economic climate and is in a solid position for future growth when the economy starts to recover." Unite , the largest union in the UK, condemned the proposed redundancies as "wholly unwarranted". National officer Peter Skyte said: "Unite is pressing for detailed information about the reasons for this proposal and the areas affected. We will be doing everything possible to protect the jobs of the workforce." Fujitsu UK, which recorded annual revenues of more than £2bn last year, had already introduced a company-wide pay freeze and slashed the number of contractors it uses in order to save costs. A spokesman said the move was not connected with the loss of any particular piece of business, but the company has suffered some setbacks over the past year. It looks set to lose work with BT as the telecoms company recently appointed a joint venture between services group Carillion and Telent as its sole network outsourcing partner. Fujitsu has been servicing the network in several parts of the country. Last year the company was ejected from the multibillion pound renovation of the NHS computer system – the largest non-military computer project on record – as it lost its £896m contract to run hospital IT upgrades in the south of England. That business was subsequently picked up by BT. The company, which is also a shareholder in the National Lottery operator Camelot, is currently part of a consortium chasing a £1bn 10-year contract to run the armed forces' recruitment services. Job losses Recession Redundancy Work & careers Computing Japan Richard Wray guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds
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Fujitsu to cut 1,200 UK jobs
Microsoft revenue drops for first time in 23 years
The world's biggest software company, Microsoft, has suffered its first drop in revenue since it went public in 1986 as the global economic downturn savages its once indestructible sales of computer operating systems. Microsoft tonight revealed revenue of $13.65bn for the three months to March, a drop of 6% on the same period last year, as business customers trimmed their spending on technology packages such as Windows and Microsoft Office. The company's chief financial officer, Chris Liddell, offered a bleak forecast for the year ahead: "While we'd all like to think the economic recovery will be soon and painless, we unfortunately think it will be slow and painful." Net profit at Microsoft fell by 32% to $2.98bn, hit by write-downs of $420m in the value of investments and severance charges of $290m to cover job cuts. In January, Microsoft announced that it was shedding 5,000 staff in its first ever large-scale redundancies. By the end of the quarter, the company's workforce had dropped by 800 and Liddell said savings were progressing faster than anticipated. But in a downbeat assessment of prospects, Liddell described conditions as "the most difficult economic environment the company has faced in our 30-year history". On a conference call with Wall Street analysts, he said: "We remain more cautious than most about the state of the world economy." Sales in the company's client division, which sells packages such as Windows, dropped by 15% to $3.4bn with particularly steep declines in emerging markets. Microsoft's revenue from online services slipped 14% to $721m in a blow to the company's internet offering which has struggled in the face of competitors such as Google. But the company's server and tools business fared better, with a 7% increase in revenue to $3.46bn and earnings from entertainment devices such as the Xbox 360 were largely flat. Founded in 1975 by college drop-outs Bill Gates and Paul Allen, Microsoft pioneered the concept of easy-to-use computing for homes and offices. During the 1990s, the company became a seemingly indestructible money-making machine and Gates rose to become the wealthiest person in the world. As austerity bites, Microsoft has made uncharacteristic cuts including a reduction in travel budgets a delay to an expansion of its headquarters campus
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Microsoft revenue drops for first time in 23 years
Microsoft revenue drops for first time in 23 years
The world's biggest software company, Microsoft, has suffered its first drop in revenue since it went public in 1986 as the global economic downturn savages its once indestructible sales of computer operating systems. Microsoft tonight revealed revenue of $13.65bn for the three months to March, a drop of 6% on the same period last year, as business customers trimmed their spending on technology packages such as Windows and Microsoft Office. The company's chief financial officer, Chris Liddell, offered a bleak forecast for the year ahead: "While we'd all like to think the economic recovery will be soon and painless, we unfortunately think it will be slow and painful." Net profit at Microsoft fell by 32% to $2.98bn, hit by write-downs of $420m in the value of investments and severance charges of $290m to cover job cuts. In January, Microsoft announced that it was shedding 5,000 staff in its first ever large-scale redundancies. By the end of the quarter, the company's workforce had dropped by 800 and Liddell said savings were progressing faster than anticipated. But in a downbeat assessment of prospects, Liddell described conditions as "the most difficult economic environment the company has faced in our 30-year history"
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Microsoft revenue drops for first time in 23 years
Smartphones seen as industry saviours
Executives from across the mobile phone world will converge on Barcelona tomorrow for the start of the industry's biggest annual trade show. But behind the glitzy exhibition stands and the over-hyped press announcements there is a growing sense of panic as the effects of the global economic downturn start to show. Sales of mobile phones are expected to be at least 10% down this year – according to the world's largest manufacturer Nokia – at little more than a billion, and cash-strapped consumers are demanding ever cheaper deals. Attendance at the four-day Mobile World Congress is expected to be down on last year as companies, cutting staff and slashing costs, balk at the £2,600 price of a delegate pass. Organiser the GSM Association is still hopeful of a last minute rush, but by the weekend 47,000 people had registered, down from 54,000 last year. Even Carphone Warehouse boss Charles Dunstone has decided to give the show a miss with his yacht – scene of many an industry party – missing from the harbour. Representatives of the GSM Association will meet many senior figures from the mobile phone networks at a "Leadership Summit" to discuss strategies for meeting the biggest economic challenge the industry has faced in its relatively short life. "The business model of the mobile operators is creaking right now," according to Patrick Bossert from customer service experts Convergys, who has been watching the industry for years. "They are having to look at where new revenue is coming from and they are on the back foot." Research house TNS reckons that in Britain the average spending of customers on monthly contracts has dropped by £4 in the last year as they squeeze better deals from their supplier. Vodafone and O2 have admitted recently that many mobile phone customers are holding on to their existing handsets and 'trading down' to SIM-only packages or even abandoning contracts for pre-pay deals. The traditional heartland of the industry – the mid-range phone market – has all but disappeared in the more mature markets of Europe, while growth in new subscribers is slowing across the world. The glimmer of hope that many in the mobile phone industry see is the paradoxical explosion in the so-called smartphone market in the wake of the arrival of Apple's iPhone a year and a half ago. The number of smartphones – handsets with multimedia functions, web browsers and high-specification cameras – purchased has doubled in the last year, according to TNS. They accounted for about 13% last year according to Juniper Research – but are bucking the overall gloomy trend. This fact, however, means that competition is increasing among manufacturers as electronics companies that have not traditionally made phones move in to grab market share. American electronic organiser maker Palm, for instance, hopes to resuscitate its fortunes with the Palm Pre Smartphone while this year's conference will play host to the release of the first smartphone from Toshiba – with the TG01 touchscreen Windows Mobile device – as well as handsets from Taiwanese notebook producer Acer
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Smartphones seen as industry saviours
Tech Weekly podcast: CES roundup and Microsoft’s Robbie Bach
In today's instalment of this special series of Tech Weekly podcasts from two of the world's top technology shows: Bobbie Johnson straps on his shades and slips on his best gambling shoes to visit Las Vegas for the Consumer Electronics Show – which promises to deliver all manner of weird, wonderful and whizzy gadgets over the next few days. There'll be everything from big TV screens to tiny projectors, and run the gamut from gas-guzzling supercars to the greenest technologies around. Technology writer Will Head and Kat Hannaford, the news editor of T3.com , join Bobbie to discuss the gadgets that have tweaked their interest during their snek preview of the show.
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Tech Weekly podcast: CES roundup and Microsoft's Robbie Bach
Tech Weekly podcast: preview of 2009
Our predictions for what will be big in technology in 2009.
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Tech Weekly podcast: preview of 2009