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The Week Ahead: Can Apple maintain profits?


This news story was published on April 23, 2012.
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By Tom Hudson, McClatchy Newspapers –

It is tough to find fault with a company that does $2 billion of business every week, generating a half-billion dollars in profits. And it does so without borrowing a dime of someone else’s money.

That’s Apple for you. The company that saved the music industry, re-imagined the cell phone and invented the App economy reports quarterly earnings Tuesday.

Until this month, Apple and its stock were thought to be immune to market forces. Instead, they were the market forces. Where other giants failed to marry technology and simplicity, Apple created the iPad. When digital media freely galloped across the Internet, Apple corralled it in iTunes for a price. The company once best known for selling computers to schools now has its products in half of American households.

But in recent weeks the company has experienced what it means to be the ubiquitously imitated brand it is. Apple has been accused by the U.S. government with colluding to fix prices on electronic books. It faces stepped-up competition as Google’s Android software has become the world’s most popular. Its investors have been reminded that all stock prices can go down, even Apple’s.

Apple didn’t become the world’s most valuable publicly owned company by delivering underwhelming business results. For several years, the company turned product after product into cash cows. This string of success has led investors to expect more magic from the company.

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