Profits surge 24 percent at Apple

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CUPERTINO, Calif., Oct. 27 (UPI) -- U.S. technology giant Apple said the iPhone 5 has not been a flawless boon for the company, despite nearly every production measure going according to plan.

In its report for the quarter ending Sept. 29, Apple said profits surged, climbing 24 percent compared with the same quarter a year earlier, and iPhone sales make up 48 percent of the company's revenue, The New York Times reported Saturday.

In addition, the biggest problem with the iPhone 5 is that supplies are tight.

Apple shares have dropped 9 percent recently, in part because of worries over the company's ability to keep up with demand.

Apple said manufacturing costs were rising. While the holiday shopping season historically provides the company with its best quarter by far, market analyst Rob Cihra at Evercore Partners predicted the quarter's gross profit margin would drop to 36 percent in the current quarter from 40 percent in the last.

Apple Chief Executive Officer Timothy Cook said demand for the iPhone 5 was "extremely robust," and the company says it is gearing up production.

Apple is also banking on a wide array of new products. Besides a new computer in the lineup, Apple has introduced the iPad Mini.

The iPad Mini has a starting price of $329, which puts it in a different class than Amazon and Google, which also offer small tablet devices.

In general, however, the most valuable company in the world in terms of capitalization has few wrinkles on the horizon. Revenue for the year, at $156.5 billion, was higher than the combined revenue of Google, Facebook and Microsoft, the Times said.