In a week of good results across the board, Apple’s (news, site) must be the most impressive driven by iPhone sales, which hit 18 million units worldwide for the quarter that closed at the end of March, and iPad sales, which if lower than some might have predicted, were nevertheless very impressive.
Overall, the company posted US $25 billion dollars in revenues, US$ 11.2 billion more than the same quarter last year, fueled primarily by record iPhone sales, very robust demand for the iPad and strong growth in Mac sales, according to Chief Financial Officer Peter Oppenheimer.
On all that, Apple made net profits of US$ 5.99 billion. In terms of the number of units sold, leaving aside the iPhone sales, it sold 3.76 million Macs during the quarter, an increase of 28% on the quarter last year, 9.02 million iPods, a decrease of 17% on last year, and 4.69 million iPads during the quarter. Apple did not however, breakdown the sales in those of iPad1 and iPad2.
iPad and Supply
For many, the question as to why iPad sales experienced a decline from the 7.33 million iPads the company sold during the fourth quarter holiday season has not been explained, but it seems to be more to do with supply issues rather than anything else.
According to Chief Operating Officer Tom Cook, speaking to analysts after the figures were released, Apple just can’t get iPad2 out the door fast enough.
Demand from the iPad2 has been staggering, and we have been amazed that we were still heavily backlogged until the end of the quarter," Cook said, adding that Apple faces "the mother of all backlogs" with the iPad 2.
For most that would be a good complaint, and although he did not clarify what the issues were other than extraordinary demand, he did note that the earthquake in Japan, where Apple sources a lot of its parts, had little or no effect in the last quarter. Apple did not experience any supply or cost impacts from the quake, he said.
That said, it seems that demand across the enterprise is the driver for supply issues around iPad 2. Peter Oppenheimer explained that at this stage, Apple is distributing in 59 countries with CIOs in corporate environments “embracing iPad at an unprecedented rate.”
According to Oppenheimer in just over a year since it went to market first, 75% of Fortune 500 companies are now either testing, or deploying iPad in the enterprise.
In this respect he cited a list of companies that include Xerox, Boston Scientific, Disney and Prudential Finance.
We sold every iPad2 that we could make during the quarter and would have liked to end the quarter with more channel inventory. Recognized revenue from sales of iPad and iPad accessories during the quarter was $2.8 billion,” he said.
Supply of iPhones was substantially better, and Oppenheimer said that over the course of the quarter they were able to make a significant increase in their capacity once again. Apple sold 18.65 million iPhones during the period, an increase of 113% compared to the quarter last year.
Of significance is the fact that Apple started selling iPhones on the Verizon network in the US, as well as SK Telecom in Korea and Saudi Telecom in Saudi Arabia. As a result, and including carrier consolidation, Apple distributed iPhone through 186 carriers in 90 countries.
Again, like iPad, there is strong demand for iPhones across the enterprise with hundreds of private and public companies supporting thousands of iPhones on their corporate networks, including 88% of Fortune 500 companies that are testing, or using iPhone.
We ended the quarter with about 5.2 million iPhones in channel inventory, a sequential increase of about 1.7 million to support new carrier launches and existing channel partners,” he said.
Combining iPhone, iPad and iPod touch sales, Apple sold just fewer than 189 million cumulative iOS device sales through the end of the March quarter.
Mac’s Record Quarter
Finally there is Mac, which also put in record sales for the quarter with 3.76 million units sold, a growth of 28% over the same quarter last year.
Oppenheimer says that according to IDC’s most recently published estimates, there was a contraction of 3% in the PC market overall and taking this into account the Mac market performed better than PCs over the quarter.
Sales were particularly strong in the Asia-Pacific market where they were up 76% year-on-year, with the growth in sales globally fueled by the success of MacBook Air, which received a significant update in the December quarter. The MacBook Pro family was also updated during March, and although it too performed well over the quarter it will probably be the next set of results before the effects of that are noticed.
And for the rest of the year? Apple has remained typically reticent about what might or might not be coming up in terms of products. However, for a company that describes itself as firing on all cylinders, the end of this quarter could well produce more of the same.
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