April 24, 2008 | posted by Michael Baxter in New Media |

The High Street might be in trouble, but there is one new fixture that still seems to be bringing in the crowds.  It’s those Apple stores – full of those products that double up as computers and items of furniture. 

Has the Apple store become the coolest place on the High Street.   These stores are not for nerds, their typical customers seem to be trendily dressed – they are pulled in by Apple’s style – it’s become a kind of aspirational shop.

And that in a nutshell tells the story of Apple.  A few years ago there was talk of a halo effect, that people were so chuffed with their iPods they made their next computer purchase a Mac.  But now, the image is promoted by these fancy stores – and oh, yes, there’s another product too, the iPhone.

Yesterday was the occasion of the unveiling of Apple’s latest results.   Once again, the company raised the roof.

This time, profits hit $1.05 billion.  It has done better than that before, but only once and that was in the previous quarter, which included Christmas.

To put the profits in perspective, in the same quarter a year ago it made $770 million.  In 2006 the company was hailed as a wonder company when profits hit $410 million.

It seems like hype – but the fact is Apple’s performance is extraordinary – plain and simple.

It seems a tad churlish to look for negatives – but hang it, let’s be churlish.

There were two downers.    Firstly iPod sales were just 1 per cent up on a year ago – the clearest indication yet that the market could be reaching maturity.    The much heralded tie-in with the Beatles could be the only way the company can lift iPod sales in a hurry. 

The other downer was that the company’s guidance for the next quarter was less than market expectations, so the share price fell.    But then Apple is known for making conservative forecasts, so maybe you can’t read too much into that.

Maybe there is room for slight concern over the iPhone.  The product has only been on sale for three quarters – so it is early days – but, after an impressive start, the sales growth seems to have tailed-off somewhat.    Just over 1.7 million iPhones were sold, compared to 2.3 million in the previous quarter and just over a million in the first quarter the product was available.  More worryingly, reports have recently suggested the product is not quite the hit in Europe that it was in the US.

On the other hand 2,289,000 Macs were sold during the quarter, representing 51 per cent unit growth and 54 per cent revenue growth over the year-ago quarter.

Nothing lasts for ever, and sooner or later Apple’s extraordinary run of growth will slow, but as Internet TV becomes more popular, there are plenty of opportunities yet for the company.

Even so, with a PE ratio of 35.73, shares are expensive – and Apple remains so very reliant on Steve Jobs.  Mr Jobs may be able to walk on water – but he is not immortal, his energy finite.   So looking forward the question still remains as to whether the Apple followers will keep their faith when Mr Jobs is no longer preaching to them.