The One Fly in the Apple-Earnings Ointment: iPad Sales
Apple beat analysts’ earnings estimates in its second-quarter report, sending its share price up in after-hours trading. The company sold 35 million iPhones, among other eye-popping stats.
It’s pretty tough to quibble with numbers like $39.5 billion in revenue and a 93 percent year-over-year profit increase. But hey, this is tech blogging, right?
So, let’s call attention to the one key area where Apple didn’t beat estimates: iPad sales. Analysts were estimating about 13 million units sold, although the range seemed to go from about 9 million to about 15 million units. Turns out that apple sold 11.9 million iPads in the last quarter.
Let’s examine this disappointing stat, since Alexis Madrigal seems to think it’s indicative of flagging sales and the fading luster of this rather disappointing product. He seems to completely ignore the rather important information contained in this quote from Tim Cook during the conference call:
But I’d also point out that the new iPad was supply constrained last quarter for the full three weeks or so that it was shipping and is actually still constrained.
Well that certainly puts a different spin on things. In other words, Apple sold them as fast as they could make them, but couldn’t make them fast enough to align with the analyst’s predictions. Time for another quote from Mr. Cook to put iPad sales into context.
Just two years after we shipped the initial iPad, we’ve sold 67 million. To put that in some context, it took us 24 years to sell that many Macs, and five years for that many iPods, and over three years for that many iPhones, and we were extremely happy with the trajectory on all of those products.
Supply constrained for three full weeks, yet still able to sell enough to be well within the 9-15 million units predicted. I wish my flies in the ointment were that nice.