Ap­ple earn­ings jump amid ris­ing de­mand

CEO Tim Cook touts the prom­ise of ‘aug­mented re­al­ity.’

Los Angeles Times - - COMPANY TOWN -

Ap­ple Inc.’s earn­ings climbed 12% to $8.7 bil­lion in the com­pany’s lat­est quar­ter amid ris­ing de­mand for iPhones, iPads and Mac com­put­ers.

Rev­enue for the pe­riod was $45.4 bil­lion, up 7% from the same quar­ter last year.

The fis­cal third-quar­ter re­sults an­nounced Tues­day ex­ceeded an­a­lysts’ pro­jec­tions for the pe­riod, which ended July 1.

The Cu­per­tino, Calif., com­pany pre­dicted that rev­enue for its cur­rent quar­ter, which ends in Septem­ber, will range from $49 bil­lion to $52 bil­lion.

That would be bet­ter than Ap­ple’s per­for­mance a year ear­lier, when its pop­u­lar line of iPhone 7 phones came out.

The up­beat fore­cast is likely to ease con­cerns that pro­duc­tion prob­lems might de­lay the re­lease of Ap­ple’s next-gen­er­a­tion iPhone, which typ­i­cally comes out in late Septem­ber. That model is ex­pected to boast a higher-qual­ity screen and sev­eral other new fea­tures.

Ap­ple shares have in­creased nearly 30% since the be­gin­ning of the year, while the Stan­dard & Poor’s 500 in­dex has climbed 11%. On Tues­day, be­fore Ap­ple an­nounced its earn­ings, its stock rose $1.32, or 0.9%, to $150.05.

Ap­ple has been look­ing for some­thing to re­duce its de­pen­dence on the iPhone since the 2011 death of its co­founder and chief ex­ec­u­tive, Steve Jobs, the driv­ing force be­hind the com­pany’s in­no­va­tion fac­tory.

Jobs’ suc­ces­sor, Tim Cook, thought he had come up with a rev­o­lu­tion­ary prod­uct when Ap­ple be­gan sell­ing its smart­watch in 2015, but the Ap­ple Watch re­mains a niche prod­uct.

For now, the iPhone re­mains Ap­ple’s dom­i­nant prod­uct, ac­count­ing for 55% of Ap­ple’s $45.4 bil­lion in rev­enue dur­ing the three months that ended in June.

Cook told an­a­lysts dur­ing a Tues­day con­fer­ence call that the com­pany is hop­ing to use the iPhone as a spring­board into “aug­mented re­al­ity,” a tech­nol­ogy that projects life­like im­ages into re­al­world set­tings viewed through a screen.

If you’ve heard about AR at all, it’s most likely be­cause you’ve en­coun­tered “Poke­mon Go,” in which play­ers wan­der around neigh­bor­hoods try­ing to cap­ture monsters only they can see on their phones.

AR is also mak­ing its way into ed­u­ca­tion and some in­dus­trial ap­pli­ca­tions, such as prod­uct as­sem­bly and ware­house in­ven­tory man­age­ment. Now Ap­ple is hop­ing to trans­form the tech­nol­ogy from a geeky sideshow into a mass-mar­ket phe­nom­e­non.

It’s embed­ding AR-ready tech­nol­ogy into its iPhones later this year, po­ten­tially set­ting the stage for a rush of new apps that blur the line be­tween re­al­ity and dig­i­tal rep­re­sen­ta­tion in new and imag­i­na­tive ways.

“This is one of those huge things that we’ll look back at and marvel on the start of it,” Cook said.

Many an­a­lysts agree. “This is the most im­por­tant plat­form that Ap­ple has cre­ated since the app store in 2008,” said Jan Daw­son of Jack­daw Re­search.

There’s just one catch: No one can yet point to a killer app for AR, at least be­yond the year-old (and fad­ing) fad of “Poke­mon Go.” In­stead, an­a­lysts ar­gue more gen­er­ally that AR cre­ates enor­mous po­ten­tial for new games, home-re­mod­el­ing apps that let you vi­su­al­ize new fur­nish­ings and decor in an ex­ist­ing room, ed­u­ca­tion, health­care and more.

For the mo­ment, though, we’re ba­si­cally stuck with demos cre­ated by de­vel­op­ers, in­clud­ing a “Star Wars”-like droid rolling past a dog that doesn’t re­al­ize it’s there, a dig­i­tal replica of Hous­ton on a ta­ble and a vir­tual tour of Vin­cent Van Gogh’s bed­room.

At Ap­ple, the in­tro­duc­tion of AR gets un­der­way in Septem­ber with the re­lease of iOS 11, the next ver­sion of the op­er­at­ing sys­tem that pow­ers hun­dreds of mil­lions of iPhones and iPads around the world. Tucked away in that re­lease is an AR tool kit in­tended to help soft­ware de­vel­op­ers cre­ate new AR apps.

Those apps, how­ever, won’t work on just any Ap­ple de­vice — only the iPhone 6S and later mod­els, in­clud­ing the hotly an­tic­i­pated nextgen­er­a­tion iPhone that Ap­ple will re­lease this fall. The 2017 iPad and iPad Pro will run AR apps as well.

Justin Sul­li­van Getty Im­ages

AP­PLE’S Tim Cook sees iPhone as a spring­board into “aug­mented re­al­ity.”

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