Apple, the world’s most valuable company is set to report today another record quarterly profit performance, further setting in stone its unremitting leadership in the Internet and technology businesses.
The Associated Press yesterday quoted Wall Street analysts as predicting that Apple will post a profit for the January to March period this year of $9.2 billion, viewed as nearly equal to the quarterly profit of Exxon Mobil Corp., the world’s second richest company that Apple had overtaken last year to arrive at its premier profit-making post.
Other analysts, however, fear that Apple’s giant steps are causing great havoc to competition, even as Wall Street admits that the company’s success is good for the U.S. economy, particularly memory chip makers and software developers who are riding high on the coattails of the California-based company.
Observers pointed out that while Apple has only 8 percent of the global smartphone market, it has accounted for 80% of the mobile phone industry’s operating profits.
An added worry is that other businesses riding the crest of the Apple surge are taking huge risks.
Analysts cited the current practice of three of the four largest U.S. national wireless carriers of buying Apple’s best-selling iPhones for about $659 and then selling them to customers for between $50 and $200.
AT &T, Sprint and Verizon are betting on getting their money back, plus profits, through the monthly fees paid by subscribers over the two-year period of their contracts.
At AT&T for instance, an iPhone user pays an average of $100 a month, but eventual profits are reduced by costs of network upgrades to support all the data traffic.