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Apple's Steve Jobs with the iPhone


Apple Inc. posted record sales and earnings as sales of iPhones and iPads soared, giving CEO Steve Jobs ammunition to declare victory over arch rival Research In Motion Ltd.

"We've now passed RIM, and I don't see them catching up with us in the foreseeable feature," Mr. Jobs said in uncharacteristically aggressive comments during a conference call. "We're out to win this one."

The company released fourth-quarter results late Monday, which showed profit soaring 70 per cent to $4.3-billion (U.S.) or $4.71 a share, compared with $2.82 a share a year earlier. Sales reached a record $20.34-billion, up from $12.2-billion a year earlier.

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Mr. Jobs said he "just couldn't help coming by" for the company's quarterly update, but almost outshone the Apple's dazzling results with his own brash comments about his competitors. On the call, Mr. Jobs said Apple's 14.1 million iPhone sales in the quarter, up 91 per cent, "handily beat" RIM's 12.1 million BlackBerry sales. RIM is putting off developers by employing multiple operating systems, he added.

"They must move beyond their area of strength and comfort into the unfamiliar territory of trying to become a software platform company. I think it's going to be a challenge for them," Mr. Jobs said.

He then attacked Google for characterizing Apple's software as "closed," and criticized Google's Android operating system as "fragmented." Mr. Jobs also took a swing at aspiring tablet computer makers, dismissing seven-inch screens - which includes RIM's recently unveiled PlayBook tablet - as so small that consumers will need to use "sand paper" in order to grind their fingers down to the appropriate size.

"The 10-inch screen size is the minimum required to have great tablet apps," Mr. Jobs said. "We don't think you can make a great tablet with a seven-inch screen. We think it's too small to express the software that people want to put on these things."

The company's results - which included record sales of the iPad tablet, the ever-popular iPhone and Mac computers - smashed the estimates of analysts surveyed by Thomson Reuters, which predicated revenues of $18.86-billion and earnings per share of $4.06. The quarter marked the first full earnings period in which the company's popular iPad was widely available. In the third quarter ending June 26, Apple sold 3.27 million iPads.

Apple's momentum, despite the hype around its new tablet computer, continues to be fuelled by the ever-popular iPhone, which outsold the iPad roughly 2 to 1 in the fourth quarter, and continued to gain favour with corporate clients. It is yet more proof of the exploding global popularity of smart phones for tech firms, a segment that benefits not just Apple but handset makers such as RIM and the multiple brands running Google's Android operating system. Android recently shipped more devices to be sold in various markets than Apple did, as Mr. Jobs pointed out on the call.

"Despite all the focus on the iPad, from a growth perspective it's the iPhone driving the show," said Kevin Restivo, a mobility analyst with IDC. "Smart phone-only suppliers are benefiting from people's move from feature phones to smart phones. Apple and RIM can trade barbs all they want, but both are growing at a tremendous pace."

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As the iPhone soared, the company's stalwart iPod continued to sag: Although the MP3-player continues to dominate with more than 70 per cent of its market, year-over-year sales were down 11 per cent to around nine million units. Mr. Restivo noted that the iPod tends to be consumers' first Apple product, and customers usually upgrade to more lucrative Apple products as they become part of the Apple "ecosystem," a cornerstone of which is the company's iTunes music store.

Apple, known for its smart phone stronghold in North America, also continued to drive sales overseas - with store openings in Beijing and Shanghai smashing sales records for previous store launches, according to Apple chief financial officer Peter Oppenheimer. The iPhone, according to Mr. Jobs, also continues to push into the corporate enterprise space - a stronghold of RIM's - with more than 80 per cent of the Fortune 100 companies testing out the iPhone or offering it to their employees.

The same goes with the iPad, Mr. Jobs added, sounding blasé a few weeks after RIM unveiled its corporate-focused PlayBook tablet. "We haven't pushed it real hard in business, and it's being grabbed out of our hands."

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