Apple, Google and Microsoft post another quarter of record profits

Apple reported a third straight record profit last night as the world’s largest public company capitalised on incessant demand for its latest iPhones.

The company said net income almost doubled to $21.7bn (£15.6bn) and revenues jumped by 36pc to $81.4bn in a blowout quarter during which sales of all its major product lines increased.

The iPhone, which makes up half of the Silicon Valley giant’s sales, grew by 50pc year on year in the quarter to June, continuing a strong run for the iPhone 12 that Apple released last year. It came as both Google and Microsoft posted record financials, continuing big tech’s winning streak in the pandemic.

Tim Cook’s company has thrived during the pandemic as consumers turned to its devices while working and learning from home, and thanks to a revamp of its most popular products.

In the run-up to the figures, analysts had raised concerns that the global microchip shortage, which has spread beyond cars into consumer devices, could hit supplies of Apple’s Mac computers and iPad.

However, sales of both were higher than a year ago. Revenues from its Mac line, which Apple has relaunched featuring chip designs from Britain’s Arm, climbed by 16pc. Sales of the iPad were up 12pc, while accessories such as the Apple Watch grew by 36pc.

Apple is facing a growing regulatory challenge to its increasingly lucrative digital services division, which includes the App Store and services such as Apple Music. Services revenues jumped 33pc to a record $17.5bn, making it Apple’s most important area after the iPhone.

Competition authorities are growing increasingly suspicious of the fees Apple charges app developers to sell through the App Store, and have accused the company of giving preferential treatment to its own services. Apple is also awaiting judgment in a lawsuit brought by Fortnite maker Epic Games against its App Store rules.

Apple’s latest iPhones, unveiled last October, were the first to support next-generation 5G mobile networks, an upgrade that has boosted sales this year. Analysts expect that the next models, which are likely to be unveiled in September, will come without similar major upgrades.

Google’s parent company Alphabet said its revenue had surged 62pc year on year to $61.9bn, with profits nearly tripling from $7bn to $18.5bn. Shares jumped as much as 3.7pc after the bell.

It was a marked rebound from the same period last year, when the search giant reported a decline in sales for the first time on record as advertising around the travel and job markets froze.

Chief executive Sundar Pichai ­credited a “rising tide of online activity in many parts of the world” for the rebound.

Microsoft revealed a 21pc increase in revenues to $46.2bn and a 47pc jump in profits to $16.5bn, with the software giant’s cloud software and gaming businesses continuing to thrive.

The company, which followed Apple in securing a $2 trillion valuation earlier this year, has been boosted by more demand for its online Office software, with many workers stuck at home.