Apple breaks iPhone sales record again
But iPad 2 suffering from 'mother of all backlogs,' says exec
Computerworld - Apple today said it sold a record 18.6 million iPhones in the first three months of 2011, the third consecutive quarter the company's smartphone has set sales records.
Apple posted record revenues of $24.7 billion for the quarter -- also the third quarter running that it's broken the $20 billion mark -- which represented an 83% increase over the same period last year.
Profits were just shy of the $6 billion Apple recorded last quarter, but 95% higher than the first quarter in 2010.
Executives boasted that the firm generated the highest revenues for a January-to-March quarter in company history.
"It was really solid across the board," said Brian Marshall, an analyst with Gleacher & Co.
The highlight, Marshall said, was obviously the iPhone, which contributed nearly 50% of Apple's total revenues for the quarter, the largest slice ever for the smartphone.
"iPhone sales were a hair's breath from making Apple a phone company," said Ezra Gottheil of Technology Business Research, referring to the smartphone's revenue impact. "But that's the adoption curve on new technology. The iPhone is screaming out of there, and it's a heck of a business, and will be for at least the next year or two."
Apple sold a record 18.6 million iPhones, up 113% over the same period last year and a 15% increase over the final quarter of 2010, which was the previous record. On a revenue basis, the iPhone's contribution was 49.9% of total revenues, two-and-a-half times that of the Mac or more than four times that of the iPad.
Marshall expressed disappointment in iPad sales, which sold 4.7 million units, a 36% drop from the prior period and well off his projection of 5.3 million. Most other analysts had forecast even larger sales for the tablet, with some predicting as many as 8 million would be sold.
"Clearly, demand for the iPad 2 was much greater than Apple expected," said Marshall, talking about the continued problems the company has had meeting demand.
Apple declined to separately report sales numbers for the new iPad 2, which launched last month, but CFO Peter Oppenheimer claimed that Apple could have sold more if it had them. "We sold every iPad 2 we could make," he said.
Later, Apple COO Tim Cook called the iPad 2 demand "staggering," and said that orders were bogged down in the "mother of all backlogs."
Currently, the lag time between ordering and shipping is between one and two weeks on Apple's Web site.
Cook said that the company was working hard on matching supply with demand, but refused to predict when Apple would be able to make enough tablets. "I'm confident that we'll build a large number of iPads this quarter, but when we will match demand, I don't know," Cook said.
Marshall's betting that Apple will solve the supply problem quickly, perhaps as early as the current quarter, which ends June 30.
During the Q&A section of the call, Cook was asked why Apple -- which sold 7.3 million first-generation tablets in the last three months of 2010 -- couldn't meet demand for the iPad 2. Was it a forecasting error, an analyst asked.
"Product transitions are never simple," Cook answered. "And remember, we have to call [manufacturing numbers] many many weeks in advance."
Marshall bought that explanation. "I do think it was the transition," he said. "The iPad 2 is 33% thinner and 15% lighter. It's not that easy to build them."
Gottheil also didn't believe Apple made a error in forecasting. "Anytime there are people still queued up for a new product, I can't see how you screwed up," Gottheil said.
- Apple's CarPlay vs. MirrorLink: Is there a need for both?
- Apple's CarPlay to spark mobile apps war in your car
- iTunes is almost as big a biz as OEM Windows
- Icahn says 'I can't' and stops $50B fight over Apple stock buyback
- Lenovo-Moto deal's impact on Apple? Zip
- Office 365 turns one, but success is tough to tally
- Everyone bets on bigger iPhone for '14
- Apple's iPod business collapses as revenue becomes a rounding error
- Update: More than 1B smartphones were shipped in 2013
- Cook admits Apple blew the call on the iPhone 5C
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions...
- Streamline Data Protection with IBM Tivoli Storage Manager Operations Center IBM Tivoli Storage Manager (TSM) has been an industry-standard data protection solution for two decades. But, where most competitors focus exclusively on Backup...
- Simplify and Consolidate Data Protection for Better Business Results Learn about IBM® Tivoli® Storage Manager Operations Center, which provides advanced visualization, built-in analytics and integrated workflow automation features that leapfrog traditional backup...
- HP HAVEn: See the big picture in Big Data HP HAVEn is the industry's first comprehensive, scalable, open, and secure platform for Big Data. Enterprises are drowning in a sea of data...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Smartphones White Papers | Webcasts