Apple blew past forecasts and reported record quarterly net profit and revenue on Tuesday in the first quarter since the death of founder Steve Jobs, driven by strong sales of the new iPhone.

Apple said its net profit more than doubled in the first quarter of fiscal 2012 to a record $13.06 billion while revenue soared to an all-time high of $46.33 billion from $26.74 billion a year ago.

Earnings per share of $13.87 easily surpassed the $10.08 per share expected by Wall Street analysts.

Apple said it sold 37.04 million iPhones in the quarter which ended on December 31, up 128 percent from a year ago, and 15.43 million iPads, a 111 percent increase.

The California-based gadget-maker sold 5.2 million Macintosh computers in the quarter, up 26 percent, and 15.4 million iPods, a 21 percent decline from a year ago.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” Apple chief executive Tim Cook said in a statement.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline,” Cook said.

Apple’s previous quarterly highs for iPhone, iPad and Macintosh sales were 20.34 million, 11.12 million and 4.89 million respectively.

Investors applauded the blockbuster quarter, sending Apple shares up 7.5 percent to $452.00 in after-hours trading.

It was the company’s first full quarter without its visionary co-founder and chief executive Steve Jobs, who died of cancer a day after the October 4 launch of the iPhone 4S.

Jobs’s widow, Laurene Powell Jobs, was a guest in the box of First Lady Michelle Obama as US President Barack Obama delivered his State of the Union address on Tuesday.

The hot-selling iPhone 4S was the “fastest iPhone rollout” in the company’s history, Cook said in a conference call with financial analysts.

“We made a very bold bet on demand” but the company was “still short” in some markets due to pent-up demand, he said.

“As it turned out we didn’t bet high enough,” said Cook, who took over as CEO from Jobs in August.

Growth in iPhone sales in the United States and Japan was “great,” he said. “We could not be happier.”

The fiscal 2012 first-quarter included a 14th week, the important holiday shopping week between Christmas and New Year’s.

Apple said it ended the quarter with a cash pile of $97.6 billion, compared with $81.6 billion for the September quarter.

“We are actively discussing the best use of our cash balance,” Peter Oppenheimer, Apple’s chief financial officer, said in the conference call.

“We don’t have anything to announce specifically today,” he added.

Cook indicated the priority for iPhone expansion was China.

“We have a ton more energy in the China market today,” he said.

The iPhone was sort of a “catalyst” in spurring sales of other Apple products, much like the iPod’s “halo” effect on the Macintosh in 2003-2004, he said.

The iPad, which runs on Apple’s operating software, is benefiting from competition among other tablets and there is even some “cannibalization” of Windows personal computers by the Apple tablet computer, Cook said.

“We’re just going to innovate like crazy in this area,” he said.

More than 55 million iPads have been sold since its launch in April 2010.

Apple’s forecasts for the current quarter leaped over Wall Street expectations: $32.5 billion in revenue and earnings of $8.50 per share. The market had penciled in $32 billion and $8.03, respectively.

Apple’s iCloud, launched a few months ago, now has more than 85 million subscribers.

That was an “incredible” response from customers that marked a fundamental shift in recognition of the need to have numerous devices integrated online, Cook said.

He said iCloud is “not a product, it is a strategy for the next decade.”

Average annual salaries for Silicon Valley technology workers surpassed the $100,000 mark last year, according to a new survey, pushed higher by the strength of the region’s latest boom.

Tech-jobs website operator Dice Holdings Inc. said salaries for software and other engineering professionals in California’s Silicon Valley rose 5.2% to an average $104,195 last year, outstripping the average 2% increase, to $81,327, in tech-workers’ salaries nationwide. It was the first time since Dice began the salary survey in 2001 that the wage barometer broke the $100,000 barrier, said Tom Silver, a Dice senior vice president.

The findings come amid a Web boom that has fueled companies such as Facebook Inc., Zynga Inc. and Twitter Inc. Last year, several of the companies—including LinkedIn Corp. and Zynga—went public, with Facebook poised for an initial public offering this year. Their success has sparked the creation of numerous new start-ups, which in turn has spurred a hiring war for software engineers and others.

In contrast, job growth elsewhere in the nation has remained relatively slow. U.S. employers added 200,000 jobs in December, and the unemployment rate ticked down to 8.5%, its lowest level since early 2009. But it is unclear how sustainable such gains may be.

“There’s a tussle for talent growing in Silicon Valley and employers have to pay up,” said Mr. Silver. Overall, tech-job postings in Silicon Valley on Dice rose to 5,026 earlier this month, up 26% from 3,974 a year ago, he said, even as tech-jobs postings nationwide only rose 11% over the same period.

The hiring boom is evident at SmartRecruiters Inc., a San Francisco start-up that offers a free recruiting tool. Itclosed a $5 million venture-capital financing this month and wants to add 40 employees by this summer, said Chief Executive Jerome Ternynck.

But with many job candidates receiving multiple offers, “the limiting factor is the ability to find the right people,” said Mr. Ternynck. “We’d hire them all tomorrow if we could.”

Silicon Valley’s job-market strength has also had a halo effect on bonuses. Silicon Valley tech-worker bonuses jumped 13% last year to an average $12,450, versus an 8% increase to $8,769 nationwide, according to Dice. Meanwhile, hourly contractor rates in Silicon Valley rose 11% last year to an average $74 an hour, compared with $63 an hour nationally, said Dice.

Manufacturers are hiring again in the US, softening a long slide in factory employment.

But for a new generation of blue-collar workers, even those protected by unions, the price of employment is likely to be lower wages stretching to retirement.

That is particularly true of global manufacturers like General Electric.

With labour costs moving down at its appliance factories here, the company is bringing home the production of water heaters as well as some refrigerators, and expanding its work force to do so.

Auto industry
The wages for the new hires, however, are $10 to $15 an hour less than the pay scale for hourly employees already on staff – with the additional concession that the newcomers will not catch up for the foreseeable future. Such union-endorsed contracts are also showing up in the auto industry, at steel and tire companies, and at manufacturers of farm implements and other heavy equipment, according to Gordon Pavy, president of the Labor and Employment Relations Association and, until recently, the AFL-CIO’s director of collective bargaining.

“Some companies want to keep work here, or bring it back from Asia,” Pavy said, “but in order to do that they have to be competitive in the final prices of their products, and one way to be competitive is to lower the compensation of their American workers.”

The shrunken pay scale for newcomers – $12 to $19 an hour versus $21 to $32 an hour for longtime workers – threatens to undo the middle-class status of even the best-paid blue-collar jobs still left in manufacturing. A similar contract limits the wages of new hires at a nearby Ford Motor Co. stamping plant, but neither GE’s 2,000 hourly workers nor Ford’s 2,900, nor their unions nor the mayor, Greg Fischer, have objected.

Job creation
Quite the contrary, all argue that job creation must take precedence over holding the line on wages, given that the unemployment rate in this Ohio River city is above 9 percent and several thousand people apply for every unfilled, $13-an-hour factory job.

“The trade-off is absolutely worth it,” Fischer said, arguing that while the city is actively subsidizing GE’s expansion here, mainly through tax rebates, that is not enough. “You must have a globally competitive wage to create jobs,” the mayor insisted.

The generational setback implicit in a “globally competitive wage” is evident at GE’s Appliance Park, the complex of factories where GE makes refrigerators, washing machines, dishwashers and other household appliances. Six years into the adoption of lower wages for new hires, half of the hourly workers are paid at the reduced scale.

Source of friction
In an earlier era, that would have been a source of friction, perhaps protest. Now it isn’t, and in an interview William Masden, 62, earning $31.78 an hour after 42 years at Appliance Park, attempted an explanation. The younger workers still get annual raises, he noted, and by the time they top out, he and his peers – the oldest baby boomers – “won’t be here any longer to remind them of what they are missing.”

Linda Thomas, 37, one of the first to be hired in 2005 under the new arrangement, amends that explanation. Her hourly wage, $18.19, has almost topped out, although it is nearly $14 an hour less than Masden’s. But she keeps silent. Too many unemployed people, she explained, would clamor for her job and her wage if she were to protest.

“You don’t want to rock the boat,” Thomas said. “You take a chance on losing everything you have if you do.”

Masden’s final years at GE, doing safety checks, and Thomas’ willingness, however reluctant, to do equivalent work as a forklift driver at a much lower wage illustrate a big reason that General Electric decided to expand production here.

A new hybrid electric water heater will be manufactured in Louisville in a factory now being renovated, rather than in China, where GE makes its current model. And some production of refrigerators is being repatriated, mainly from Mexico.

“We have gotten to a point where making things in America is as viable as making things anyplace in the world,” said James P. Campbell, president and chief executive of GE’s appliances and lighting division, citing the drop in labor costs as a crucial reason. “They are significantly less with the competitive wage,” he said, “and that is a big help.”

The revival is in an early stage. By 2005, GE’s employment in Louisville had fallen to 2,300 hourly workers from a high of 17,000 in the 1970s. At that point, with the company insisting on concessions, Local 761 of the IUE-CWA union, representing the hourly factory workers, agreed to the lower wage scale for new hires. The union has ratified it in subsequent contracts.

Employment, in turn, has finally stopped falling and is beginning inch up from a low of 2,000 early this year as new hires start to come aboard faster than older workers leave. But the new people are always at the lower wage scale, except for some specialists – like machinists, who earn up to $26 an hour.

“We are getting from the company an $800 million investment in Appliance Park over the next two years, and what we had to do for that investment was accept the ‘competitive wage,”’ said Jerry Carney, president of Local 761.

Partly as a result, GE’s employment remains slightly greater in the U.S. than abroad. Nearly 80 percent of those in the U.S. are in manufacturing, reflecting GE’s origins and still its greatest strength. It has 219 factories in this country and 16 more are being built or renovated, including two in Louisville. An additional 230 GE plants are overseas, which helps to explain why 60 percent of the company’s $147 billion in annual revenue – from all sources – is generated abroad, up from 35 percent a decade ago.

Carney’s competitive wage – a euphemism that GE officials also use – is really, as both sides acknowledge, the price of halting or at least slowing this migration. It is the lower tier of a two-tier system first introduced in the 1980s. That system limited those consigned to the lower tier to 20 percent of a company’s work force.

In addition, new hires eventually advanced to the higher tier. Bonuses and profit sharing eased the pain, and they still do, but for a new generation of workers, graduation to the upper tier is disappearing, and the lower tier is becoming a new hire’s lifetime wage scale.

Economy strengthens
“My hope is that we will rebuild wages to their old levels over time as the economy strengthens and the demand for workers rises,” said Thomas A. Kochan, a management expert at the Massachusetts Institute of Technology. “But that is by no means a certainty.”

Neither the nation’s unions nor the government has tracked the number of jobs downgraded to the equivalent of a lower-tier wage scale, or the number of people who, like Thomas, have gone through the experience of a downgrade: in her case, from $19 an hour at the Ford auto body stamping plant – until she was laid off in 2005 – to a starting wage at GE a few months later of $12 an hour. “At the time I was very angry about the comedown,” she said, “but then I asked a couple of others who had gone through the same experience how they felt and they said, ‘We’re thankful to have a job.”

The decline in unit labor costs is striking. In manufacturing, the wages and benefits invested in each unit of production have fallen in eight of the past 10 years, a net decline of 13.6 percentage points, the Bureau of Labor Statistics reports. Productivity played a role – modern factories require fewer workers. Still, the decline is the greatest in such a short time since the statistic was first tracked in 1951.

In China, in sharp contrast, unit labor costs in manufacturing have risen in recent years, which means the gap between the U.S. and China, while still great, is nevertheless narrowing slightly – one reason that GE is making its new water heater here instead of there.

“We are at an inflection point in manufacturing in terms of relative cost structures,” said Mark M. Zandi, chief economist for Moody’s Analytics. “Ten years ago, it was a no-brainer to locate in China, and now it isn’t so clear whether China is the low-cost place to produce.”

Domestic production
The downshift in wages, however, is not GE’s only explanation for the rise in domestic production. In interviews, GE executives put almost as much emphasis on “lean manufacturing.” Production workers on a lean factory floor are encouraged to point out inefficiencies in assembly line routines and to participate in altering the routines. Given the productivity gains implicit in lean practices, GE envisions a growing hourly workforce at Appliance Park, but one that is nowhere near its size in the 1970s.

“The trade-off is absolutely worth it; the alternatives are $15 an hour or zero dollars an hour,” Fischer said.

Masden, divorced with two grown daughters, and Thomas, single and childless, reluctantly accept this view. Masden wonders if the next generation will ever make it into the middle class, as he did. “I never had to think about pay,” he said. “I just kept putting money in my pocket.”

Thomas doubts that her pay will rise above the $19 an hour she had earned at the Ford plant before her layoff. Her two older sisters still employed there are similarly worried.

“They were making $22 an hour and they are now making $15 an hour,” Thomas said, referring to a concessionary United Automobile Workers agreement. “They were totally upset. But the alternative offered by the company was cut the wage scale or close the plant.”

Virtually launching his re-election campaign, President Barack Obama hit out at ”outsourcing” as he called keeping alive the American dream ”the defining issue of our time” and pledged to fight obstruction by opposition Republicans.

“No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits,” Obama said as he defended a long list of his trademark policies — tax increases on the wealthy, Wall Street reform, health care reform and government stimulus spending.

“Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values,” he said.
He called for lowering corporate taxes and providing incentives for US manufacturers to bring overseas jobs back to America, while ending tax breaks for businesses that continue to outsource.

At the same time, Obama said, every multinational company should pay a basic minimum tax while giving American manufacturers a tax cut.

“It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America,” Obama said, adding a line that he repeated throughout the speech in a challenge to Congress. “Send me these tax reforms, and I’ll sign them right away.”

With unemployment still above 8 percent amid a sluggish economic recovery, Obama framed the challenges facing the country as a choice between opportunity for some or giving everyone a chance to prosper.

“The defining issue of our time is how to keep that promise alive,” the president said. “No challenge is more urgent. No debate is more important.”

He also challenged Congress to act on comprehensive immigration reform, a major election-year issue for the important Hispanic-American vote. Short of a major overhaul, he called for legislation like the DREAM Act that provides children of illegal immigrants who go to college or serve in the military a path to possible citizenship.

In the official Republican response, conservative Indiana Governor Mitch Daniels said that “it’s not fair and it’s not true for the president to attack Republicans in Congress as obstacles”.

“No feature of the Obama presidency has been sadder than its constant efforts to divide us, to curry favour with some Americans by castigating others,” Daniels said.