Apple regain control as profits rise

Smartphone giant Apple are preparing to buy back shares from investors after better than expected profits. It’s a development that supports attempts by leaders within the company to reassert Apple’s focus as an ethical innovator rather than just a money making machine, both vindicating recent moves and providing support to continue them.

Profits against expectations

With nearly 44 million iPhones sold in the first quarter of 2014, Apple saw $10.2 billion in profit. While less than the profits for the final quarter of 2013, which saw sales boosted by Christmas present shopping, this is still a better result than commentators had expected, and a 17% improvement on the same period in previous years.

Apple shares rose in value on the back of the news, as investors shifted their money towards the technology giant. It was a good day for Apple.

Buying back control

Along with this news, Apple have announced that they intend to buy back $30 billion worth of their stock.

This follows recent battles between Apple’s board and some shareholders. Apple’s chief executive angrily told a group of investors that they should not invest in Apple if they were only in it for the money, after those investors tried to undermine the company’s move towards more environmentally friendly ways of working.

There’s a battle in the works over the heart and soul of Apple, in which the company’s leaders are trying to show that big business can have a positive impact on the world rather than just focusing on the bottom line. Buying back shares may give them more control over the situation, reducing the pool of investors and their interest in the company. It remains to be seen whether those dissatisfied with the company’s direction will take this opportunity to withdraw, or whether they will see Apple’s rising profits and decide that they still want in.

Either way it’s clear, Apple’s public move towards ethical business practices has done the company no harm.

Challenges ahead

Despite this good news it’s not all plain sailing for Apple.

The company is facing growing competition, especially in the smartphone market. On the one hand big competitors like Samsung are pressing hard for a larger share of the market, with constantly improving models and competitive pricing. On the other hand new companies are coming in, providing new phones for new purposes. Customers are faced with more and more options, the market is becoming saturated and providing more of the same is not enough to make a company stand out.

It’s here that Apple’s core purpose may again save them, if they can find their way. The company that brought us the iPod and whose iPhone showed that people were interested in integrated portable technology, Apple have a long history of innovation. Their output in the last few years hasn’t included such bold leaps forward, but they have been taking over small firms with new ideas, and there is talk within the company of new technologies coming down the line.

If it can stay the course, sticking to its ethical purpose while re-energising its ability to innovate, then this won’t be the last time we hear good news from Apple.

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