Two business stories from Tuesday illustrate a fact of life in the free-enterprise system:
Apple Inc. steamrolled through growing competition from smartphones and tablets running on Google Inc.’s Android operating system, as the company more than doubled its quarterly earnings and posted surging revenues on strong sales of its iPhone and iPad.
Apple’s quarterly profit rose to $7.31 billion for its fiscal third quarter, up from $3.25 billion a year earlier. Revenue soared 82% to $28.57 billion. Gross margins rose to 41.7% from 39.1% a year ago.
The results fueled a spike in Apple’s shares in after-hours trading, with the stock up 4.8% to $395.34, after ending in 4 p.m. trading at $376.85 on the Nasdaq Stock Market.
The final chapter was seven for Borders Group, the Michigan-based book-selling chain that will begin liquidating stores — including about 10 in Georgia — almost immediately.
The nation’s second largest traditional bookseller received no additional bids after a Sunday deadline passed and Monday asked a bankruptcy court for approval to liquidate. A Tuesday auction for bidders who wanted to keep Borders open for business has been canceled, according to the Wall Street Journal.
The superstore pioneer, which put countless mom-and-pop bookshops out of business, filed for bankruptcy protection in February…but was sunk by crushing debt and sluggishness in adapting to a rapidly changing industry….Borders also suffered from a series of errors: failing to catch onto the growing importance of the Web and electronic books, not reacting quickly enough to declining music and DVD sales, and hiring four CEOs in five years without book-selling experience. (emphasis added)
Considering the current political environment, however, Apple’s cash reserves of $78 billion — more than the market capitalization of Goldman Sachs — may be a double-edged sword. How long until a certain someone in Washington decides Apple isn’t a) hiring enough people, and/or b) paying enough taxes?
– By Kyle Wingfield