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Despite record earnings and iPhone sales that broadly surpassed analyst efforts, optimism about Apple's quarterly report was dampered by poorer-than-expected iPad sales.  (Source: Tablet Tutor)
IPad sales showed some signs of weakness, though

Another quarter has passed and Apple has yet again blown away analyst earnings predictions.  You'd think that the tired Wall Street gurus would have learned by now.

Leading the way was an incredible 14.1 million iPhones shipped.  Analysts predicted that Apple, beleaguered by fierce competition from Google's Android army and fallout from the iPhone 4's faulty antenna, would only ship 11 million iPhones during the quarter.  As usual, Apple's customers unquestioning loyalty and willingness to overlook the company's quality slip-ups proved a valuable asset.

Macs sales also looked promising, with 3.89 million units shipped, versus an analyst prediction of 3.7 million units.  The strong iPhone and Mac sales propelled quarterly revenue soaring to $20.34B USD (versus a consensus estimate of $18.9B USD).  Similarly, profits were up to $4.31B USD, handsomely surpassing estimates.

Apple's earnings did showcase some troublesome signs, though.  Particularly worrisome for Apple, its brand-new iPad. I twas forecast to move 4.7 million units, but only moved 4.19 million units, a sign of slowing sales.  And sales of iPods came in a 9.05 million units, falling short of the predicted 10 million units.

Its prediction of $4.80 (USD) earnings per share for its quarter in December also fell short of the bullish analyst consensus of $5.04.

These results led to an unusual trading pattern in Apple's stock after hours.  Despite reporting what seems a blowout quarter, these telltale signs of weakness sent Apple stock approximately $21/share, approximately a 6.6 percent drop.  This drop returned the stock to beneath $300, a mark that the stock just passed for the first time early this month. 

Perhaps such is the fate of an unusual company like Apple whose customers are fiercely loyal, whose actions are over scrutinized, and who continues to deliver plenty of surprises come earnings day.



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RE: Apple is doomed!
By Tony Swash on 10/18/2010 5:57:16 PM , Rating: 2
Looking at the Apple results in more detail and particularly the information in the conference call it seems clear that the iPad sales are almost wholly constrained by supply rather than demand.

In the conference call Apple CFO Peter Oppenheimer noted that they had increased iPad channel inventory by 500K to keep up with demand, but that there was still a 2-3 weeks waiting time for customers.

The CFO also noted that the iPhone was also constrained by supply for the whole quarter and could have sold more. Apple noted that 270,000 iOS devices were sold per day on average in the past 30 days, with peaks of 300,000.

Enterprise results were particularly interesting given Apple's focus on the consumer market with adoption of the iPhone in 60% to 80% of Fortune companies and 65% of Fortune 100 trying or deploying iPad.


RE: Apple is doomed!
By Pirks on 10/18/2010 6:24:43 PM , Rating: 2
Well, I still wonder who in their right mind would switch from a nice 20"-22" big screen and wide ergonomic keyboard to some microscopic device where you should learn to touch-type with a pin, use microscope to read its retina display and... run what instead of enterprise standard MS Office? I don't get it, Tony, please explain.

All in all, why would an enterprise go from one well managed platform to another given that the new platform is much much slower CPU speed wise and hence can't run any modern enterprise software, while costing approximately the same money? (I'd say typical office PC is about $600 these days which is exactly iPad and iPhone price range)

Looks like they gonna pay same money to get way worse hardware... for their typical office tasks. A contradiction, no?


RE: Apple is doomed!
By Tony Swash on 10/18/2010 6:38:23 PM , Rating: 2
quote:
Well, I still wonder who in their right mind would switch from a nice 20"-22" big screen and wide ergonomic keyboard to some microscopic device where you should learn to touch-type with a pin, use microscope to read its retina display and... run what instead of enterprise standard MS Office? I don't get it, Tony, please explain.


I don't know - why don't you ask them.

Ask the Fortune 500 companies buying the iPads and iPhones. Maybe they are all being fooled by Apple marketing.

In the conference call today with leading financial analysts Steve Jobs had this to say:
quote:
"We haven't pushed it (the iPad) real hard in business, and it's being grabbed out of our hands," Jobs said.

"We've got a tiger by the tail here, and this is a new model of computing which we've already got tens of millions of people trained on with the iPhone, and that lends itself to lots of different aspects of life, both personal and business," he said.

On the competition, Jobs said he isn't worried. "We're not done. We're working on a lot of things for the future." He added: "We're out to win this one."


RE: Apple is doomed!
By Pirks on 10/18/2010 6:52:06 PM , Rating: 3
quote:
Maybe they are all being fooled by Apple marketing.
Or maybe they are buying them just for testing and once they realize how horrible they are ergonomically wise for business/office stuff the iFad will go away in the enterprise market.


RE: Apple is doomed!
By themaster08 on 10/19/2010 1:35:12 AM , Rating: 2
Tony still fails to realise that Apple's products are next to useless in the enterprise market.


RE: Apple is doomed!
By Pirks on 10/19/2010 9:10:09 AM , Rating: 2
Why this then?

"adoption of the iPhone in 60% to 80% of Fortune companies and 65% of Fortune 100 trying or deploying iPad"

Why are enterprises buying next to useless products? Any idea, themaster08?


RE: Apple is doomed!
By sdsdv10 on 10/19/2010 11:14:45 AM , Rating: 2
That's not my experience. Our company has a consultant who bought an iPad right after they launched. He uses it as his only traveling laptop/tablet computer. Not to imply this is universal, but he certainly doesn't find it "useless".


RE: Apple is doomed!
By Gio6518 on 10/18/2010 6:44:06 PM , Rating: 2
quote:
Well, I still wonder who in their right mind would switch from a nice 20"-22" big screen and wide ergonomic keyboard to some microscopic device where you should learn to touch-type with a pin, use microscope to read its retina display and... run what instead of enterprise standard MS Office? I don't get it, Tony, please explain.


Though i do agree with you, on a personal level. There are definetely some fields that it would be useful for.


RE: Apple is doomed!
By mellomonk on 10/19/2010 3:44:41 PM , Rating: 2
quote:
Well, I still wonder who in their right mind would switch from a nice 20"-22" big screen and wide ergonomic keyboard to some microscopic device where you should learn to touch-type with a pin, use microscope to read its retina display and... run what instead of enterprise standard MS Office? I don't get it, Tony, please explain.


The days of a typical seat of PC + MSoffice have been on the wane for some time. I work in IT in a relatively conservative industry and most of our current efforts are all focused on mobility, web apps, and network services. In fact the PC+office combo is classed as a 'legacy' seat.


RE: Apple is doomed!
By Gio6518 on 10/18/2010 6:41:18 PM , Rating: 4
Best way to describe how Apple claims shortages @ minute 1:35

http://www.youtube.com/watch?v=cyY_Yt4bp84


"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov














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