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Apple almost doubles profit on iPhone, iPad sales spike

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Journalists getting to grips with the new iPad

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Apple's quarterly profit almost doubled in the first quarter of 2012, as a spike in iPhone and iPad sales eased fears of a slowdown in demand for the devices.

The world's largest technology company reported revenue of $39.2bn (£24.3bn) in the three months to March 31, up from $24.7 billion in the same period last year.

Quarterly net profit hit $11.6 billion, almost double the $6 billion reported in the first quarter of 2011. This was helped by the company's gross margin on its products increasing to 47.4% from 41.4%. Sales outside of the US accounted for 64% of the quarter's revenue.

Apple's share price has fallen in recent weeks after Verizon Wireless reported a dip in iPhone sales and Qualcomm warned of problems shipping the chips that are used in Apple devices.

Apple has partially allayed fears of declining popularity of the iPhone by announcing that it sold 35.1 million of the smartphones in the first quarter, up 88% on the same quarter a year ago and ahead of analyst expectations of around 30m units.

The company also sold 11.8m iPads during the three months, a 151% increase over the same period in 2011, and buoyed by the launch of the new high resolution iPad in mid March.

However, iPad sales were below an average analyst forecast of up to 13 million, causing some analysts to suggest that the flagship tablet is reaching saturation point.

Patrick Becker, a principal at Becker Capital Management, told Reuters: "There's no doubt looking in the last quarter and the Christmas season, Apple has executed very well. But you are starting to see the iPad ... reach some sort of saturation with the current product."

Apple is rumoured to be preparing to refresh the iPad line later this year with the launch of a new small version of the tablet, despite late Apple co-founder Steve Jobs always being opposed to the idea.

Sales of Mac computers saw much slower growth in the first quarter of 2012, at 7% year-on-year to 4m units, while the 7.7m iPods sold was down 15% year-on-year.

But Tim Cook, Apple's chief executive, welcomed the sales figures.

"We're thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter," he said.

"The new iPad is off to a great start, and across the year you're going to see a lot more of the kind of innovation that only Apple can deliver."

Shares in Apple shot up 8% in after-hours trading, after falling as much as 13% from a record high of $644 over the past two weeks.

Earlier in the month, Apple confirmed plans to use its massive cash reserves to pay its first dividend since 1995, and also launch a major share buy-back scheme.

> Apple's new iPhone 'to be made of LiquidMetal, launch in October'

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