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Apple sees Mac sales grow despite market downturn

Made $61m profit

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Apple posted a small profit last night and, more importantly, saw its unit sales increase year on year.

The Mac maker's third quarter closed with revenue at $1.475 billion, down 19 per cent on the same period last year. Despite that fall, the company posted a profit of $61 million (17 cents a share). This time last year, it posted a profit of $200 million (55 cents a share), though that figure included the sale of a portion of Apple's reserve of ARM shares.

It made the same move this time round, selling $7 million of investments, neatly balancing the $7 million it spent buying PowerSchool.

Unit sales grew seven per cent to 827,000 computers, just under a quarter of them the new iBook. Seven per cent isn't exactly a huge increase, but it's not a bad result for a depressed market. The increase largely came from sales to the education market - the iBook again - while consumer sales were sluggish, though that shouldn't surprise anyone.

That may explain why Apple is delaying the release of the next-gen LCD iMac - assuming, of course, the machine isn't announced by CEO Steve Jobs later today during his Macworld Expo keynote - and sticking with faster versions of the current models. Apple may be unwilling to risk shipping a radically new machine when the consumer market is so depressed, preferring to launch it six months or so down the line when consumers have started buying computers again. We shall see.

Margins fell slightly to 29.4 per cent from 29.8 per cent. Inventory is down to two days stock - valued at $19 million. The company has $4.2 billion in its cash reserve.

Some 44 per cent of the company's sales came from outside the US. US and Japanese sales were strong, the company said, but Europe proved weak. "Europe was the last region to show the effect of the recent economic downturn," said Apple CFO Fred Anderson "During the quarter, it felt the effects we were feeling 6-9 months ago in the US. However, the region seems to be stabilising now."

Apple took 40 per cent of end user sales, as its channel's share fell six per cent. The company's roll out of 25 retail stores through the rest of 2001 can only increase its share, boosting its financial performance.

Looking ahead, Anderson said he expects to report "slight" revenue and earnings increases for the current quarter. ®

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