UK firms are cashing in as Apple continues to shine

By Peter Ranscombe
Published on Thursday 26 January 2012 00:00

BRITISH component suppliers were among the beneficiaries of Apple’s record quarterly results after the American consumer electronics giant sold more iPhones and iPads than expected in the run up to Christmas.

Apple’s forecast-beating fourth-quarter figures late on Tuesday helped it to beat Google’s Android as the largest smartphone platform in the United States and to regain the world’s largest smartphone maker spot from Samsung.

Analysts at Espirito Santo highlighted the “positive read-across for UK suppliers – such as ARM, Imagination and IQE” from Apple’s “blow-out” first-quarter figures.

Shares in Microchip designer ARM and graphics chip firm Imagination raced higher as the pair jostled for position near the top of the FTSE Techmark risers’ board, while IQE’s stock also received a boost.

Jonathan Jackson, head of equities at Killik & Co, thinks there could be more good news ahead for investors in Apple, which is sitting on a $10.3 billion (£6.6bn) pile of cash.

He said: “We believe there are likely to be some very exciting products launched this year, including the iPad 3, an all-new iPhone 5 and an Apple television, all of which will continue to drive growth. There is the possibility that part of the cash gets returned to shareholders.”

Apple chief executive Tim Cook – who took over the top post last year after founder Steve Jobs died – hinted the iPad 3 could come as early as March.

The company sold 37 million iPhones in the run up to Christmas, along with 15.4m iPads tablets and 5.2m Apple Mac computers, all ahead of analysts’ forecasts.

Revenues hit $46.3bn, up 73 per cent year-on-year and beating predictions of $38.9bn. Profits soared 118 per cent to $13.1bn.

Brian Marshal, an analyst at ISI, said: “It was a pristine quarter. The investment community has never seen a company like this.”

It was a tale of two technology companies though after search engine operator Yahoo slipped into a fourth consecutive year of falling revenues and its 13th consecutive quarterly decline as its advertising sales fell.

Former PayPal chief executive Scott Thompson became Yahoo’s fourth boss in less than five years after replacing Carol Bartz just three weeks ago.

“There is no question we need to do better and we will,” Thompson said, warning he will close some Yahoo services. That could lead to job losses among its 14,000 staff.

Last week, co-founder Jerry Yang resigned from the company’s board and gave up his job title as “Chief Yahoo”.

• Profits at Ericsson, the world’s largest mobile phone maker, halved during the fourth quarter after a slowdown in demand for the Swedish firm’s handsets in the United States and Russia.

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