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TMCNet:  Daily Mail, London, City Focus column

[January 25, 2013]

Daily Mail, London, City Focus column

Jan 25, 2013 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- IT should have been a stellar set of results. Sales of Apple's iPhone rocketed to a record high in the final three months of last year. Some 47.8m handsets were shifted by the technology giant in the crucial Christmas period.

It also sold 22.9m of its iPad tablet computers -- beating analysts' predictions of 22.4m.

Even its iPod music player, which has been around for much longer, shifted 12.7m units.

Revenues rose 18pc compared with the same period a year before to a massive pounds sterling 34.6bn.

But yesterday Apple shares listed on Wall Street fell by more than 10pc on opening -- wiping some pounds sterling 30bn off the company's value in a matter of minutes.

Why Because the growth -- as impressive as it was -- was not as good as hoped.

Analysts had expected Apple to ship 50m iPhones, and revenues to hit pounds sterling 34.8bn.

Falling short of the expectations, even by a whisper, was taken as a sign that Apple was losing its dominance in the smartphone battle.

The figures were put out by Apple, which focused on the record numbers of phones sold rather than its failure to live up to forecasts, after the US stock market closed for the evening.

But even after Wall Street had a night to chew over the figures, shares still opened $50 lower.

The stock, which has been a miracle growth story, has lost a third of its value since September.

The results, released late on Wednesday night, came hours after news that Samsung, which has grown from a fledgling snapping at Apple's heels to a fully-developed rival, has overtaken Apple in the microchip market.

It is another victory for the South Korean phone-maker in its multi-fronted war with Apple for global smartphone dominance.

Last year Samsung, which has been propelled to success with its Galaxy range, became the world's biggest seller of smartphones, a title it wrestled away from Nokia.

Now it has overtaken Apple to become the world's largest user of chips.

According to authoritative figures released by industry analyst firm Gartner, Samsung placed pounds sterling 15.1bn worth of chip orders in 2012, while Apple ordered 'just' pounds sterling 13.6bn.

Hewlett Packard and Dell were third and fourth in the table, with Nokia coming in a poor tenth.

The Finnish phone group, once the undisputed leader in mobiles, saw its woes increase yesterday after it announced a disappointing set of results that saw it axe its dividend for the first time in 143 years.

The group has struggled to keep up with Apple and Samsung, and has put everything on its last throw of the dice, its new Lumia phone.

The phone, which sold 4.4m units in the last three months, is a combined effort with Microsoft -- the computer behemoth which late last night released its own set of results.

Nokia has scrapped the dividend to help conserve cash, it said.

Samsung, which puts out its three-month results later today, is expected to report profits of pounds sterling 5.4bn.

Analysts now say it is a lack of innovation holding back Apple from regaining the crown.

With each of its major products -- the iPod, the iPhone and the iPad -- Apple set the industry benchmark for music machines, for phones and for personal computers.

It now has to find a new device to channel its revolutionary designs.

Industry experts say it is the key to Apple winning the battle of the tech giants.

Analysts at UBS said: 'We saw a clip of Steve Jobs being interviewed before he returned to Apple, in which he said the reason for the company's trouble was a lack of innovation.

"Although the competition has stiffened, we think it premature to count Apple out in terms of regaining a phone lead and creating new categories." Others thought the solution was more simple.

"We think Apple is losing the screen-size wars," said Jefferies & Company analyst Peter Misek.

Demand, he added, was moving away from the iPhone's 3.5-inch and 4-inch screens to larger 5-inch screens offered by rivals such as Samsung.

Despite all the noise around the company, and whether it has lost the drive to conquer the market in the way it used to, chief executive Tim Cook remained confident.

"Apple is in one of the most prolific periods of innovation in its history," he said.

"We're very confident in our product pipeline." Given the problems with its expectations management in the past 24 hours, Cook must be confident Apple has something very special up its sleeves.

___ (c)2013 Daily Mail (London, ) Visit the Daily Mail (London, ) at Distributed by MCT Information Services

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