Apple looks to TV as profits set to hit $9.5bn

Apple is expected to deliver record profits this week as Wall Street analysts increasingly turn their focus to a television product as the company's next engine of growth.

Apple is expected to deliver record profits this week as Wall Street analysts increasingly turn their focus to a television product as the company's next engine of growth.

The iPad maker is forecast to have chalked up $9.5bn (£6.1bn) of profits in the final three months of last year, a 58pc increase from the same quarter in 2010.

Sales of the iPhone fuelled the rise, according to Credit Suisse, which estimates demand from China helped the company sell 30m of the phones in the quarter. iPad sales are set to rise 90pc in the quarter.

But as 2012 begins, it is the signs that Apple may be seriously developing a television that is generating interest among
those who track the company.

Co-founder Steve Jobs, who died last October, fuelled the interest by telling his biographer, Walter Isaacson, that he had "finally cracked" a television with a simple interface that would synchronise with Apple's other devices.

"We believe that tackling TV is a natural next move for Apple in the livingroom," according to Ben Reitzes, an analyst at Barclays Capital.

Apple does already have a product known as Apple TV, a device that consumers can plug into their televisions to gain access to iTunes. Gene Munster, a leading Apple analyst at brokerage Piper Jaffray, says that Apple is now working on a serious product that may be introduced late this year or in early 2013.

Chief executive, Tim Cook, is likely to be questioned on whether Apple has any plans for a television product when he delivers the company's quarterly results on Tuesday. There have been worries that, in the absence of Mr Jobs, Apple will struggle to sustain the innovation that helped pull the company back from the brink in the late 1990s.

Mr Cook may not give anything away at a company that is famed for its secrecy. The depth of that secrecy is a key defining feature of Apple, according to new book on the company that will be published this week.

In Inside Apple: How America's Most Admired – and Secretive – Company Really Works, Adam Lashinsky claims that Apple's employees are kept in silos, have the need to be secret instilled in them through the fear of dismissal and that the secrecy around product launches is worth millions of dollars of revenues.

"Like a horse fitted with blinders, the Apple employee charges forward to the exclusion of all else," writes Lashinsky.

Of more immediate concern to analysts will be when Apple introduces the third version of the iPad. Most Apple watchers have pencilled in March for a device that, according to technology research firm IDC, controls almost two thirds of the market for tablet computers.