Apple Sold 3.27 Million iPads, Earned $15.7 Billion

 
 
By Nicholas Kolakowski  |  Posted 2010-07-20
 
 
 

Apple sold 3.27 million iPads in the third fiscal quarter of 2010, on its way to earning total revenues of $15.7 billion and a net quarterly profit of $3.25 billion. As in previous quarters, both Macs and iPhones experienced a year-over-year increase in sales, while iPods continued their single-digit decline.

Apple sold 3.47 million Macs during the quarter-a 33 percent increase from the year-ago quarter-and 8.4 million iPhones, a 61 percent increase. Apple's reported sales of 9.41 million iPods represented an 8 percent decline from the same quarter in 2009; the company has long suggested that cannibalization by the iPhone is at least partially responsible for that decrease.

Peter Oppenheimer, Apple's chief financial officer, mentioned during a July 20 earnings call that the company expected to pay out roughly $175 million in free rubber bumpers for the iPhone 4. On July 16, Apple CEO Steve Jobs announced during a hastily organized press conference that customers who purchase an iPhone 4 through Sept. 30 would be eligible to receive a free bumper, which covers the device's external antenna rim. Touching that rim, some customers and publications have complained, results in dampened reception. 

Tim Cook, Apple's chief operating officer, suggested during the earnings call that the company would be ramping up iPad production. "We're increasing capacity as quickly as we can," he said. He offered no guidance as to when production and demand for the iPad would reach equilibrium.

Cook also suggested that the controversy over the iPhone 4 had not translated into decreased sales for the device: "Let me be very clear. We're selling every unit we make currently. "

Apple's second quarter of fiscal 2010 had been similarly strong, boosted by strong sales of both Macs and iPhones, with revenue of $13.50 billion and a net quarterly profit of $3.07 billion. That not only beat Wall Street estimates of $12 billion, but represented a substantial revenue increase from the same quarter in 2009, when the company tallied revenues of $9.07 billion and net profit of $1.67 billion.

By the time of that April 20 earnings call, the iPad had been on sale for only a few weeks in the United States, making it impossible to accurately determine the device's overall impact on the company's bottom line. Another quarter later, though, its effect is apparent.

Hours before Apple was scheduled to give its third-quarter 2010 results, analyst firm iSuppli published a research note suggesting that the company would ship 12.9 million iPads in 2010, followed by 36.5 million in 2011 and 50.4 million in 2012. That represents an increase from its April forecast of 7.1 million units.

"The key to continuing success will be how quickly Apple responds to issues as they arise and whether the company can align suppliers to meet demand needs," Rhonda Alexander, director of monitor research for iSuppli, wrote in the July 20 research note. "Apple's acceleration of its component demand indicates that the company has raised its iPad production target for 2010."


Rocket Fuel