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Summary:

After today’s earning report for the second fiscal quarter, Apple’s conference call was something of a dénouement. In a relatively dry call without the presence of Steve Jobs, the main topic of interest was the iPad; the questions focused on supply problems, the answers avoided them.

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After today’s earning report for the second fiscal quarter, Apple’s conference call was something of a dénouement. In a relatively dry call without the presence of Steve Jobs, the main topic of interest was the iPad; the questions focused on supply problems, the answers avoided them. Despite selling just 4.69 million iPads during the quarter, definitely on the lower end of estimates, Apple executives were “thrilled” by the reception of the iPad 2, though admitted they were facing the “mother of all backlogs.”

When pressed as to why Apple wasn’t prepared to produce more iPad 2s for launch when during the holiday quarter Apple sold more than 7 million, the response was that product “transitions are never simple.” Nonetheless, Apple executives are proud of the “progress on production,” asserting that it was better than with the original iPad. To that end, the company plans on expanding the number of countries next week, and add more during the quarter. If that seems contradictory, well, it is, and no time frame was given on when supply and demand equilibrium would be reached, except that Apple executives are “confident we’ll produce a very large number” this quarter.

Those like myself thinking Apple might add another iPad model this year, perhaps even an iPad 3, can forget it. If the product transition is this difficult for the iPad, it’s nearly impossible to imagine Apple attempting another transition during the holiday quarter.

Besides the iPad, there were only a few points of interest during the call, including:

  • Apple Retail will have its tenth anniversary and one billionth visitor next month, and, as has been the case for a while now, “about half” of people buying Macs in stores are new to the platform.
  • On Steve Jobs, executives see him on a regular basis. He’s involved in major strategic decisions, and wants to be back as soon as he can.
  • China now accounts for a tenth of Apple revenue.
  • Demand for the MacBook Air remains strong, while consumer response to the new MacBook Pros has been “excellent,” and the Mac has outgrown the PC market for 20 straight quarters.
  • iPhone growth is “off the charts” in two places, the U.S. and China, up 155 percent and 250 percent, respectively.
  • Don’t expect an LTE iPhone anytime soon, as Apple is “not going to make” the kind of design compromises the first generation chipsets require.
  • The iPod touch continues to account for more than half of iPod sales.
  • On the recent patent lawsuit with Samsung, Samsung “crossed the line,” so Apple went to the courts after trying to resolve the issue.

Finally, when pressed on the analogy of the Android being like Windows PCs in the 90’s and the iPhone the Mac during the same period, Apple executives sidestepped. Citing the iOS platform as a whole, app counts, the value of and integrated versus “fragmented” platform, Apple executives “feel good about where we are.”

That answer was typical of the call, which was short on real information, but short on genuinely interesting questions, too. Nary a white iPhone or Apple TV question was heard, despite recent talk swirling around both. Hopefully, Steve Jobs will be back for some trash talking of the PlayBook come July.

  1. Ted J Cranmore Wednesday, April 20, 2011

    ” a relatively dry call without the presence of Steve Jobs”

    Eh? Steve Jobs almost never attends the conference call.

    While I don’t expect another iPad model, a new additional product is simpler than a transition from old to new as timing does not need to be precise — you don’t have to drain the channel just as you ramp up the new line.

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  2. Why did anyone assume there’d be another iPad this year in the first place? These rumors never made much sense to me. I mean, why? Because the iPad 2 didn’t get a bunch of features some bloggers all over the ‘net fantasized about?

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  3. “a relatively dry call without the presence of Steve Jobs”
    Indeed, the second largest company in America having another blowout quarter and iPhone sales up 95% year on year?

    Let me know what a company would have to do to have something other than a dry call?

    Charles you’ve reportes this as if it was an Apple “non-event”. Look at what Apple actually announced rather than spin it as a disappointment. You are trying too hard.

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