These are stories Report on Business is following Wednesday, April 25, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
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Is iPhone killing off iPod?
The trend isn't new, but a look at the numbers of the last couple of years is fascinating considering how the iPod changed the way the world listens to music.
Neither is the concept dying - indeed, it's gaining rapidly - but the original instrument of change is fading.
Yesterday's second-quarter results from Apple Inc. AAPL-Q highlighted the wild popularity of the iPhone, and how it's cannibalizing sales of the iPod, sales of which slipped 15 per cent in the quarter to 7.7 million.
To be sure, 7.7 million is still a lot, but consider that at the iPod's peak, in the first quarter of 2009, Apple sold a record 22.7 million of the devices.
In fact, on a year-over-year basis, iPod sales have declined every quarter since the trend began in the third quarter of 2009. Sales of the iPhone have surged from 5.2 million to 35.1 million over the same period, climbing 88 per cent in the latest quarter, according to Apple's results announced late yesterday.
At the same time, Apple's iTunes has become an $8-billion (U.S.) operation.
Apple shares are soaring in pre-market trading this morning after yet another blowout quarter, which, as The Globe and Mail's Omar El Akkad writes in today's Report on Business, should put to rest any question of slowing growth.
The tech giant, whose iPad sales climbed 151 per cent in the second quarter to 11.8 million, posted a profit of $11.6-billion or $12.30 a share, diluted, compared to $6-billion or $6.40 a year earlier. Revenue rose to $39.2-billion from $24.6-billion.
Markets on rise
Apple's results are helping to buoy global markets, which are setting aside economic concerns, for now, anyway. Investors are also awaiting the Federal Reserve's policy announcement this afternoon.
Tokyo's Nikkei rose 1 per cent, while Hong Kong's Hang Seng slipped 0.2 per cent. In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were up by between 0.1 per cent and 1.6 per cent by about 7:30 a.m. ET.
Dow Jones industrial average YM-FT and S&P 500 ES-FT futures also rose, as did those for the tech-dominated Nasdaq.
"Markets are in an upbeat mood this morning, with European stocks up 1 per cent to 2 per cent and U.S. futures pointing to a higher open after Apple handily beat earnings expectations after the close yesterday," said Robert Kavcic of BMO Nesbitt Burns.
"Commodity prices are broadly higher, with WTI oil up 43 cents to just below $104, but gold is little changed at $1,640. All eyes are now on the Fed ahead of its 12:30 p.m. policy announcement. Spanish 10-year yields are about 6 basis points lower to 5.8 per cent, which is also helping sentiment."
Britain back in recession
Markets may be in a better mood, but the economic readings from Britain are disappointing.
Britain's Office of National Statistics said today the economy contracted by 0.2 per cent in the first quarter, which puts the country back into a technical recession, given the fourth quarter's fall of 0.3 per cent.
"It’s turning into another bad week for Mr. Cameron," sales trader Yusuf Heusen of IG said of the prime minister.
"After yesterday’s revelations of close contact between the Murdochs and the culture secretary, he now has a renewed recession in the U.K. to contend with. Preliminary GDP data from the ONS showed that the economy shrank by 0.2 per cent in the first quarter of 2012, where growth of 0.1 per cent had been forecast."
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