A cool $18 billion

There’s nothing that attracts critics and harbingers of doom more than success.

Apple, having posted the largest quarterly profit of any public corporation in history, is being written off because of the 18% fall in sales of iPads compared with a year ago.

The plain facts, according to Apple, are that in the three months ended just after Christmas 2014, it sold over 74 million iPhones, over 21 million iPads, 5.5 million Macs, and received nearly $5 billion from services, most prominently its online music, apps, movies, and books.

This success was worldwide. Apple’s domestic market in North America continued to grow healthily, but is now smaller than those in Europe and Greater China combined, a good indication of how strongly they have grown.

As of 27 December 2014, Apple held nearly $20 billion in cash and equivalents, and the total value of its assets was over a quarter of a trillion US dollars.

My only fear for the future is what next? For such a rich and successful corporation, Apple’s spend on research and development is surprisingly low: just $374 million in the quarter, admittedly up 30% on a year ago. This will not be a complete reflection, though, as some hardware R&D will appear in the balance sheets of subsidiaries it bought for that purpose.

Despite its extraordinary cash holdings, Apple has not gone on a shopping spree to acquire future components and technology for new products. The sceptics among you would suggest that its forte is design rather than more fundamental innovation, and it is heartening that it seems to be avoiding some of its costly mistakes of the past, projects like Copland or the Newton which burned cash so there was almost no tomorrow.

Watch this space…