Apple's OS X Lion Launching, iPad, iPhone Quarterly Sales Soar

Apple reported its new OS X 10.7 "Lion" is launching July 20, and that iPad and iPhone sales are up, as part of its July 19 earnings call.

Apple reported significant growth in iPad and iPhone sales for the fiscal 2011 third quarter, on its way to quarterly revenues of $28.57 billion and net profit of $7.31 billion.

In all, Apple sold 20.34 million iPhones during the quarter, a year-over-year increase of 142 percent. It also sold 9.25 million iPads, good for a year-over-year increase of 183 percent. Sales of 3.95 million Macs represented a 14 percent increase from the same quarter in 2010.

"We sold every iPad we could make," CFO Peter Oppenheimer told analysts and media listening to Apple's July 19 earnings call, while suggesting that significant majorities of the Fortune 500 are studying how to best integrate the bestselling tablet into their employees' workflow. The iPhone is also apparently enjoying an uptick in adoption among enterprise users.

As with previous quarters, Apple faced a significant decline in iPod sales: 7.54 million units sold, a 20 percent dip from the year-ago quarter. The company traditionally ascribes this softness in media-player sales to cannibalization by the iPhone.

"We're thrilled to deliver our best quarter ever, with revenue up 82 percent and profits up 125 percent," Apple CEO Steve Jobs wrote in a July 19 statement accompanying the numbers. "Right now, we're very focused and excited about bringing iOS 5 and iCloud to our users this fall."

Even before Apple's July 19 earnings report, analysts and pundits had turned their attention to the back end of 2011, when the company is expected to release a host of new software-including the Mac OS X "Lion" and iOS 5 operating systems-along with a new iPhone.

"The concern on [Wall Street] seems to be more about the outlook for the third quarter, ongoing supply constraints for the iPad and the timing of the iPhone introduction," Tony Ursillo, an analyst with Loomis Sayles & Co., told Reuters July 15.

For many, questions (and buzz) are growing around the nature of that iPhone rollout. The blog Boy Genius Report, citing "new information from an incredibly solid source," posted July 18 that Apple is planning to launch a no-contract iPhone priced at $350. "It's entirely possible that the low-cost iPhone will in fact be the iPhone 3GS," that posting added. "We are told that Apple will continue to sell the current iPhone 4 as well, finally giving the company a full range of devices in the lower, mid, and high-end price segments."

But Apple likes to keep its future plans shrouded in secrecy, and company executives on the July 19 earnings call were tight-lipped about the iPhone's future. Oppenheimer did reveal, however, that Apple plans on launching the latest version of Mac OS X 10.7 "Lion" July 20. The latest version of Apple's long-running Mac OS X franchise includes full-screen applications, tweaks to the user interface (such as disappearing scroll bars and an increased range of gesture controls) and an AirDrop feature that wirelessly shoots files to other users.

Oppenheimer acknowledged that iOS 5 and iCloud will launch during the fall time frame, along with a "major product transition that we won't talk about." That could be the closest thing to an actual iPhone reference. The iOS 5 update includes a wide variety of new features specifically designed to make Apple's mobile devices more competitive against Google Android, Windows Phone and Research In Motion's BlackBerry franchise.

Apple COO Tim Cook, also on the call, suggested that the iPhone's strong quarterly sales were due to expansion in regions such as China, Latin America and the Middle East, which he defined as "markets that Apple has not traditionally been as strong in." On top of that, the iPhone appeared on 42 additional carriers.

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