Apple surpassed US$700 (S$857) in late trading after announcing record first-day orders for the latest iPhone, fuelling optimism that it will keep generating the revenue growth that transformed it from a niche computer manufacturer into the world's most valuable business.

Shares climbed to as high as US$700.44 after reaching a record US$699.78 at the close in New York. The stock has advanced by 73 per cent this year.

Since its 2007 debut, the iPhone has become Apple's top-selling product, accounting for about two-thirds of profit. Signs of robust demand reinforced expectations that Apple will withstand accelerating competition from Samsung and Google in the US$219.1-billion smartphone market.

"It leaves me in awe," said Mr Rex Ishibashi, Chief Executive Officer of Callaway Digital Arts, which develops games for the iPhone. "It's reflective of how important these technologies have become in our lives."

Apple's surge gathered steam last Friday after it began taking orders for the iPhone 5. Its website said new orders would not ship until Sept 28 - a week after the handset is due in stores - an indication that supply may be running thin.

Apple surpassed Exxon Mobil to become the biggest company in the world by market capitalisation last year after overtaking Microsoft as the most valuable technology company in 2010. iPhone sales last quarter alone reached US$16.2 billion, 33 per cent higher than Google's total and almost as much as Microsoft's US$18.1 billion in revenue.

The share rally is poised to continue, according to analysts who are predicting that, on average, Apple will rise to about US$773 in the coming 12 months.

TODAY