Shares
climbed as high as $701.79 after reaching a record $699.78 at the close
in New York. The stock has advanced 73 percent this year.
The
iPhone 5, which features a bigger screen, faster chip and a lighter
body, sold 2 million units in first-day orders, more than double a
record set by the previous model, Apple said. Since its 2007 debut, the
device has become Apple’s top-selling product, accounting for about
two-thirds of profit. Signs of robust demand reinforced expectations
that Apple will withstand accelerating competition from Samsung
Electronics Co. and Google Inc. in the $219.1 billion smartphone market.
“It leaves me in awe,” said Rex Ishibashi, chief executive officer of Callaway Digital Arts
Inc., which develops games for the iPhone. “It’s reflective of how
important these devices and these digital technologies have become in
our lives.”
Apple’s surge gathered steam Sept. 14,
after it began taking orders for iPhone 5. Apple’s website said new
orders wouldn’t ship until Sept. 28, a week after the handset is due in
stores, an indication that supply may be running thin.
“The initial batch is sold out,” Shaw Wu,
an analyst at Sterne Agee & Leach Inc., said in an interview. He
raised his sales estimate for the quarter ending in September to 26
million units, from 23 million. “We think that could turn out to
be conservative.”
Exxon, Microsoft
Apple
surpassed Exxon Mobil Corp. to become the biggest company in the world
by market capitalization last year after overtaking Microsoft Corp. as
the most valuable technology provider in 2010. Before his death in
October, co-founder Steve Jobs
mastered a strategy of pushing Apple beyond its core business of
selling computers into new markets, including digital music and mobile
phones. Each new family of products helped the company boost revenue
while inducing investors to snap up more shares.
Revenue
increased to $35 billion in the June quarter from $1.73 billion in the
last quarter before Jobs returned to Apple in 1997. Apple’s shares
crossed the $600 threshold in July, after passing $500 in February and
$400 last year.
IPhone sales last quarter alone
reached $16.2 billion, 33 percent higher than Google Inc.’s total and
almost as much as Microsoft Corp.’s $18.1 billion in revenue.
58 Million
As
many as 58 million units of the iPhone 5 may sell by the end of the
year, according the average estimate of analysts surveyed by Bloomberg.
That could generate as much as $36.2 billion in sales for Apple.
Apple
has grown adept at keeping existing customers and drawing new ones
through incremental improvements to the hardware and software of its
products while also cultivating a developer community that cranks out
thousands of applications for use on the company’s phones and computers,
said Dan Morris, chief investment officer at Morris Capital Advisors, whose largest holding is Apple.
The
company’s shares are also getting a boost from a legal victory in
August, when a jury said Samsung copied the iPhone. The outcome of the
California trial may result in a ban on certain Samsung phones in the
U.S., and it ratchets up pressure on Apple competitors to make their
products less like the iPhone and iPad.
TV Challenges
Gains
in coming months will hinge on the success of future products, such as a
smaller version of the iPad tablet, which according to people with
knowledge of the matter will be released in October. Apple is also
trying to make headway with products that let users view TV shows and
movies on Apple devices. Yet the company has struggled to come to terms
with communications providers over how products will be crafted, and
media companies have been reluctant to cede control over content and
customer relationships.
“That may be a tough market for them,” Morris said.
For
now, the share rally is poised to continue, according to analysts who,
on average, are predicting that Apple will rise to about $773 in the
coming 12 months, data compiled by Bloomberg show.
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