Apple shatters sales records, calls Android tablets bizarre

Sells 16M iPhones, 7M iPads as revenues break $20B mark second quarter running

For the second quarter running, Apple said on Tuesday that it had set Mac, iPhone and iPad sales records.

CEO Steve Jobs, who joined the earnings announcements last October, did not participate today. Jobs, 55, announced yesterday that he was taking an immediate medical leave "so I can focus on my health."

As he usually does, chief operating officer Tim Cook, who will run Apple in Jobs' absence and is the front runner for the CEO spot if Jobs does not return, was on the call with Wall Street analysts.

Apple posted record revenues of $26.7 billion for the quarter -- the second quarter in a row that the Apple broke the $20 billion mark -- which represents an increase of 71 per cent over the same period last year and a 31 per cent higher result than 2010's third quarter. Profits were $6 billion, another quarterly record.

"We're running out of superlatives," Ezra Gottheil, an analyst at Technology Business Research, said of Apple's numbers.

"Pretty solid, very solid, and across the board," added Brian Marshall, an analyst with Gleacher & Co. "The entire [business] model continues to work."

In the quarter that closed Dec. 31, Apple sold 4.1 million Macs, breaking last quarter's then-record of 3.9 million machines. Mac unit sales were up six per cent over 2010's third quarter, and 23 per cent over the same quarter in 2009.

Apple has set Mac sales records in five of the last six quarters, and beaten the computer industry average growth rate in 19 consecutive quarters.

Apple also sold 16.2 million iPhones, up 86 per cent over the same period last year. Alone, the iPhone arm of Apple brought in more than $10 billion in revenues.

As they did in October, Apple executives today said that there was still iPhone sales it had left on the table.

"We could have sold even more iPhones if we could have supplied them," said Peter Oppenheimer, Apple's chief financial officer.

With the short supplies in mind, one analyst asked how Apple would handle the introduction of the iPhone 4 on Verizon next month.

Rather than answering the question, Cook talked about iPhone sales growth -- sales were more than two billion higher than the third quarter -- then said, "We're going to do everything possible to get [the iPhone 4] into the hands of as many Verizon customers as possible."

Cook declined to project when Apple's iPhone supply would finally match the demand for the smartphone.

"Clearly, demand continues to outstrip supply, and I don't expect that to change anytime soon," said Marshall. "They just don't have enough manufacturing facility."

Marshall wouldn't speculate on how the limited supply of iPhones will affect the launch on Verizon in the U.S., but Apple's implication was that there may not be enough to satisfy the initial demand by people wanting to ditch AT&T, or by current Verizon customers who have lusted for the iPhone but refused to switch carriers.

Gottheil said he thought Apple would meet demand for its CDMA iPhone on Verizon as long as the company's projections were accurate, not something Apple has always managed.

The iPad's fourth quarter sales totaled 7.3 million, a jump of 75 per cent from the prior period, and the second quarter running that the tablet has outsold Apple's Mac line.

However, the unit sale gap between the two widened in the last three months of 2010, with the Mac group selling just 56 per cent as many systems as the iPad division did tablets. By comparison, in the third quarter -- the first when iPads outsold Mac -- Apple sold 97 per cent as many Macs as iPads.

iPad sales were higher than the average projection of 6.2 million, and higher than all but three estimates by either Wall Street or amateur investment analysts, according to a table collated by Fortune earlier on Tuesday.

Apple racked up 2.9 million notebook sales, an increase of 10 per cent over the previous quarter and 23 per cent more than the same quarter of 2009.

Gottheil attributed the surge in laptop sales to the October introduction of new MacBook Air systems, and the higher average sale price of Apple's notebook line to buyers opting for the more expensive 13-in. models rather than the entry-level $999 11.6-in. MacBook Air.

Desktop Mac sales, however, were down oen per cent year-over-year, to 1.2, a slight decline from the third quarter, as well as off from the same quarter in 2009.

Gottheil said he found even that small slip surprising, since both comparisons were to quarters when Apple revamped its iMac systems. "Desktop sales a year ago were very strong, and leapt to record numbers," he said, impressed that Apple was still able to nearly match those numbers.

Exec slams Android tablets

Although Jobs wasn't available, Cook stepped in to bash Android, as Jobs did during the last earnings call when he vowed Apple's iPhone "will triumph" over smartphones running Google's mobile operating system.

When asked to comment on potential iPad rivals, Cook laid into the competition, calling current tablets running Android "bizarre products in our view" because their version of the operating system wasn't designed for tablets.

Of the Android tablets that many manufacturers strutted at the Consumer Electronics Show earlier this month, Cook was slightly kinder. "There's nothing shipping yet, so I don't know [how they'll do against the iPad]," he said. "But it's hard for me to understand that in a side-by-side comparison, that an enormous amount of people won't select an iPad."

Cook also described tablets running Windows as "big and heavy and expensive" that "customers are not interesting in."

Even when credible tablets make it to market, Cook continued, he argued that Apple has a "huge" advantage because of its early entry into the space.

"I think they got Windows tablets correct," Marshall said. "But they were a little dismissive of Android as vapor because we'll see them shortly."

No analyst asked about Jobs' medical leave, when -- of even if -- he might return to the company as CEO, or how his absence will impact the firm, its revenues or its product offerings.

"That was the elephant in the room," said Marshall, who said he had queued up to ask about Jobs, but wasn't called on during the 40 minutes of Q&A.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesApplehardware systemstablet PCslaptopsfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?