Apple reported 4.19 million iPads last quarter. That disappointed some analysts, but Apple's evolving store channels could increase sales.
Apple CEO Steve Jobs may have appeared unexpectedly on his company's
Oct. 18 earnings call to trumpet a $20 billion quarter, but Wall Street
analysts seemed somewhat disappointed by sales and margins for the iPad.
For the fiscal 2010 fourth quarter, Apple reported sales of 4.19
million iPads-a significant increase from the 3.27 million sold during
the tablet PC's inaugural quarter.
Nonetheless, that figure seemed below par to some analysts, who have
been predicting enormous sales for the iPad into 2011. Gross margin
pressure on iPads was also stronger than expected, likely helping dip
Apple's stock price Oct. 19.
Sales of the iPad were "disappointing," Lloyd Walmsley, an analyst
with Primary Global Research, wrote in an Oct. 18 e-mail to eWEEK, "but
supply constraint is likely the main culprit." However, "our supply
checks indicate they can do 6.5-7 million iPads in [the fourth quarter]
given more supply and wider distribution (Verizon, AT&T, Target,
Best Buy in more stores)."
Apple has recently begun an aggressive iPad push into retail stores
aside from its own. In addition, Apple may announce a deal for a
Verizon iPhone, which would increase the smartphone's already red-hot
profile. For the fiscal 2010 fourth quarter, Apple reported iPhone
sales of 14.1 million units, easily trumping sales of 3.89 million Macs
and 9.05 million iPods.
Walmsley wrote that the "iPhone [is] doing incredibly well, with
units of 14.1 million up 91 percent year-over-year and way ahead of
expectations of 11 million." He added: "This is before expanding to
Verizon in the U.S. and Vodafone in Germany and Tata and Reliance in
India, all of which we expect soon."
Worldwide media tablet sales will reach 19.4 million units in 2010,
according to an Oct. 15 research note from Gartner. A significant
portion of that growth will be driven by iPad sales. Gartner also
suggested that tablet sales are having a negative impact on sales of
other mobile devices.
"The all-in-one nature of media tablets will result in the
cannibalization of other consumer electronics devices such as
e-readers, gaming devices and media players," Gartner analyst Carolina
Milanesi wrote in an Oct. 15 statement accompanying the research note
"Mini-notebooks will suffer from the strongest cannibalization threat
as media tablet average selling prices (ASPs) drop below $300 over the
next two years."
Despite analyst disappointment, Apple CEO Steve Jobs insisted during
the company earnings call that the iPad was, in effect, a Godzilla to
rival devices' Tokyo.
"I have a hard time imagining what those [competing] strategies are.
Tablets with far less functionality are having a hard time matching us
in price," Jobs told financial analysts. "Flash hasn't presented a
problem at all ... as you know, most of the video on the Web is available
He added: "We think we have a very good product here that's hard to match, and we're not done."
Rival devices poised to hit the market, such as the Samsung Galaxy
Tab and Research In Motion's PlayBook, are expected to include features
such as dual-cameras and video conferencing unavailable in the current
version of the iPad. However, analysts and pundits expect to refresh
the iPad with new features within the next few months.