Apple revenues miss expectations as iPhone sales disappoint

Apple is coming under increasing pressure from Samsung and other rivals

Computing giant Apple has reported flat profits and record revenues that still fell short of market expectations.

Net profit came in at $13.1bn (£8.7bn), unchanged from a year earlier due in part to higher costs associated with new product launches.

Revenue was up 18% at $54.5bn, thanks to record sales of iPhones and iPads, the company said.

But Apple shares fell in after-hours trading, as sales of the iPhone in particular disappointed.

Shares in the firm have fallen almost 30% since September over concerns the company may be losing its edge over increasingly confident competitors.

The company's products are facing a growing challenge from Samsung and other makers of Android-based devices.

Some analysts have said Apple is not competitive on price in key emerging markets where many cannot afford their products and other firms sell smartphones at much lower prices.

However, as well as a rival, Samsung is also a supplier to Apple. Its shares fell 1.7% on the news of the disappointing iPhone sales.

LG, which provides displays for Apple products, fell 3.1%, and Hon Hai, which assembles iPhones and iPads, dropped 3.2%.

'Thrilled'

Apple said it sold 47.8 million iPhones in the quarter, up from 37 million a year earlier, and 22.9 million iPads, compared with 15.4 million in the same period in 2011.

Many analysts had expected iPhone sales, following the release of the iPhone 5 in September, to break the 50 million mark.

"We're thrilled with record revenue of over $54bn and sales of over 75 million iOS devices in a single quarter," said Tim Cook, Apple's chief executive.

"We're very confident in our product pipeline as we continue to focus on innovation and making the best products in the world."

Analysts took rather a different view.

"The revenue number is dismal as far as what the expectations were," said Jeff Sica at Sica Wealth Management. However, he added that Apple was suffering from a "curse of high expectations".