Apple CEO Tim Cook said during his company’s recent earnings call that iPad sales haven’t really been affected by the Amazon Kindle Fire, which is no doubt contributing heavily to the success of Android tablets. It’s also likely the Barnes & Noble Nook Color and Nook Tablet are included in the Android figures. Instead, Cook admitted the iPad has had some cannibalization effect on sales of Macs, and he predicted that one day, the tablet market will be larger in volume than the PC market.

Compared to Android, Apple still has a dominant position in the tablet market, with a 57.6-percent share compared to Android’s 39.1 percent, according to Strategy Analytics’ most recent numbers. In terms of year-over-year growth, the tablet space has grown by 150 percent between the end of 2010 and 2011. In other words, even if shares were more evenly split, the iPad would still be seeing big gains in unit sales.

The PC market, on the other hand, contracted by around six percent in the fourth quarter of 2011, according to research firm Gartner. That’s despite 20 percent growth by Apple’s own Mac line of computers. Kevin Tofel recently pointed out here on GigaOM that half of computing device sales are now mobile. If the trend of growing tablet and smartphone sales continue, and PC sales continue to decline, we’ll soon be in a position where mobiles are considered a primary device by the majority of users.

Apple will continue to sell iPads. A new refresh expected in the coming months might even help it turn the tide of slipping market share, since while the low-cost Kindle Fire may be a success, other Android tablet makers still seem to be having a hard time putting out a product consumers can get genuinely excited about. Kevin wrote last week about how Android 4.0, while it improves the Android tablet experience, still has a lot of glaring pain points. Also, Android’s tablet-specific app library lags considerably behind Apple’s, and isn’t catching up anywhere near as fast as the market on the smartphone side.

The companies putting out Android tablets that fail to achieve the Kindle Fire’s level of success are the same ones being hurt by the slowing PC market, and they’re the ones that stand to lose the most. Amazon’s Kindle fire has reportedly sold as many as 6 million units through the end of 2011, according to estimates, which would make it the world’s best-selling Android tablet.

Apple continues to appeal to a steadily growing audience of tablet users, but Amazon is answering the call of those who were happier buying bargain-priced netbooks for their basic computing needs, rather than spending more on an iPad. That’s the market PC makers should have been trying to retain with their own tablet efforts, and also the one Amazon has positioned itself best to appeal to.

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Wu says in his note that Apple looks to be on track to have sold 29.5 million iPhones during its first financial quarter of 2012, up from his firm’s previous prediction of 28 million devices. Wu hasn’t changed Mac or iPad sales expectations, which remain at 5.2 million and 13.5 million units respectively, but the increased iPhone sales lead him to anticipate $38.8 billion in revenue, and $10.34 in earnings per share. Before today, Agee had been modelling $37.7 billion in revenue and $10 EPS.

The numbers are relatively conservative when compared to the bigger picture. Fortune rounded up a collection of analyst expectations ahead of today’s call on Sunday, and found that the average revenue prediction among independent analysts was $43.14 million, with $12.01 EPS and 33.35 million iPhones sold. Among institutional analysts, of which Wu is one, Fortune found average revenue estimates were at $39.23 million, with $10.19 EPS and 30.25 million iPhone sold. Wu’s new numbers will alter those figures slightly upward, since his original, more conservative estimates figured into Fortune’s calculations.

Apple generally makes a point of being conservative with its own estimates of financial performance going forward, but Wu suggests in his note we might not see as modest an outlook as usual. That’s because the iPhone 4S launched in China on Jan. 12, Wu says, and because his supply checks suggest an iPad 3 launch is very near, which could definitely boost next-quarter performance. The 4S launch in China, which sparked riots and caused Apple to shut down physical retail store sales, certainly seems to have been met with strong demand.

We’ll have coverage of Apple’s quarterly earnings and the company’s conference call with executives right here, so check back to see how expectations match up with reality.

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Stock prices may have been buoyed by news that Apple continues to regain mobile market share based on the strength of its iPhone 4S sales. Nielsen reported Wednesday morning that since the introduction of the 4S, Apple’s share of the smartphone market has climbed steadily in the U.S. The Nielsen report’s findings are very similar to U.S. smartphone numbers released by NPD last week.

Apple also has an earnings call scheduled for Jan. 24, at which many analysts expect the company to announce record sales across its device lineups. We’ll likely see some numbers revealed early at tomorrow’s special education event in NYC on Thursday, since Apple typically spends some time at media presentations talking up recent successes and revealing information like up-to-date App Store download numbers, for example. We’ll have live coverage of that event beginning at 10 a.m. EST.

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The MacBook Air was the only notebook that saw increased shipments during the quarter, according to Digitimes Research, which said on Monday that notebook shipments slowed by 8.7 percent sequentially to 48.59 million units worldwide during the quarter.

In Apple’s last quarterly earnings report, it reported 4.89 million Macs sold, meaning if we use Digitimes’ estimate of 1 million MacBook Airs sold, the notebook represented roughly 20 percent of the total. We know Apple’s iMac is also performing well, but it’s logical to assume the Air is growing in influence in terms of the overall Mac picture. Expect that trend to continue, since analysts expect the so-called Ultrabook category to explode in the next six years.

Apple doesn’t usually break out sales of individual Mac lines from the overall Mac category total, but it will still be interesting to see if it has any official comment on the success of the Air during its quarterly earnings conference call on Jan. 24.

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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.

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Mac sales are expected to be between 3.5 and 4 million units, up from 2.9 million last year. More interesting, IDC is reporting ten percent growth year-over-year for Mac sales in the U.S., and while Toshiba also saw growth, HP, Dell, and Acer saw declines of 2.4, 11.8, and a CEO-firing 42.1 percent, respectively. According to IDC, “media tablets” like the iPad could be one factor in those declines. However, the reverse appears to be true for Apple, with the iPad having yet another “halo effect” on Mac sales. This ensures the Mac will remain a major focus for Apple, good news for Mac users, but which Macs will receive Apple’s attention in the future?

While Apple doesn’t break out numbers on individuals models, 70 percent of Macs sold last quarter were laptops, with the redesigned MacBook Air likely leading sales. Analysts expect the trend towards portability to continue, even though desktop sales are actually increasing. Nonetheless, the continued decline in market share likely means less focus on Mac Pros, Mac minis, and even the iMac. The Xserve, of course, is no longer part of the picture at all, having been discontinued.

Also in decline, or at the least stagnating, are iPod sales, likely to be between 9.5 and 10 million units, compared to 10.9 million last year. Sales of iPods have been slowly declining since 2008, but that decline is tempered by the increased average selling price of iPod units. That is attributed to the iPod touch, which accounted for half of all iPod sales in the holiday quarter last year. That’s great for the iOS platform, far more important to the future than Apple controlling 70 percent of the declining market for media players. The interesting question will be whether, despite alleged e-mails from Steve Jobs to the contrary, the iPod classic will be phased out. For that matter, merging the iPod nano and shuffle into a single device starting at $99 doesn’t seem like an impossibility, either.

For the iPhone, the opposite might happen with the introduction of news models and price points. Sales for last quarter will likely be between 16 and 20 million units, but it’s hard to be too optimistic because of the uncertainty over Verizon iPhone sales. Apple, never shy about being self congratulatory, has been silent on sales, though Verizon has said the iPhone 4 was the “largest retail launch” in company history. But even if Apple sold 20 million iPhones last quarter, that would be ten million fewer than Google is reporting for Android activations. Those numbers are likely the reason Tim Cook was hinting about the iPhone being “not just for the rich” earlier this year. A low-priced, current generation of iPhone would definitely help keep the iPhone from being relegated to niche status in an Android world.

As for Android doing to the iPad what was done to the iPhone, it hasn’t happened so far, though estimates on iPad sales are all over the place, anywhere between 5 and 10 million. Arguably, if iPad sales are near the holiday quarter’s 7.3 million, that will put the iPad on track for 30 to 35 million units sold this calendar year. That kind of success took years for both the iPod and iPhone to achieve, but let’s hope Apple isn’t getting fat on margins and lazy. Competitors like Samsung and beleaguered Acer are finally bringing tablets to market with lower price points than the iPad. Price will be the challenge for the iPad in the second half of the year, a challenged that could be met with another iPad 2.

In summary, my predictions for next week are:

• Revenue, EPS: $24.9 billion, $5.05
• Macs: 3.75 million
• iPods: 9.95 million
• iPhones: 17.55 million
• iPads: 7.05 million

What are your estimates for Q2 2011?

And don’t forget TheAppleBlog will provide highlights of the earnings report and the conference call, including any trash talking from any Apple execs on RIM’s Playbook.

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1. The Steve Work Ethic

Considering the turbulence Apple faced Monday and Tuesday, it’s difficult to imagine that every analyst would choose to not ask questions about the impact Jobs’ medical leave of absence would have on the company, yet none did, at least not directly. However, one question was posed about “long-term planning” about products.

“In my view, Apple’s doing the best work ever,” said COO Tim Cook, adding that the company was “very happy” with the product pipeline, and then he said this:

“The team has an unparalleled breadth and depth of talent and innovation that Steve has driven in the company, and excellence has become a habit, and so we feel very confident about the future of the company.”

Present or not, the influence of Steve Jobs still guides Apple.

2. Apple and the Dragon

When queried about how Apple can manage to sustain the insane growth of the present and the past, the answer that came up repeatedly was Asia, specifically China. The company stated that years ago Apple identified China among emerging as its “top priority” and the results are “absolutely staggering.” China, Hong Kong, and Taiwan generated some $2.6 billion in revenue for the quarter, quadrupling performance over last year. The number of visitors and sales at Chinese Apple Stores exceeded those of every other store, including flagship stores in the U.S. and Europe.

Besides China, sales in Japan were up 83 percent year over year, with strong growth for the Mac: up 56 percent. Korea was also singled out as being very receptive to the iPhone, and Japan was mentioned as well, but clearly, China is the focus of new markets for Apple going forward.

3. The Mac Is Back

Actually, it never left. For a jaw-dropping 19 consecutive quarters, the Mac has grown faster than rest of the PC market. For the most recent quarter, the Mac achieved 23 percent growth, compared to a meager three percent for the rest of the industry. Apple sold more than 850,000 Macs in retail Apple Stores, and once again, for nearly 10 years, “about half” of those purchasing Macs were doing so for the first time.

As to what people were buying, the biggest sellers were the MacBook Pro and the new MacBook Air. Apple executives described the Mac as a “phenomenal” part of their growth. That growth included 2.9 million laptops sold, representing 70 percent of Macs sold during the quarter. Consumers loved new features like “instant on” and the speed of solid-state drives according to Apple. Look for SSDs to migrate to other Mac portables soon, most likely with faster CPUs from Intel.

4. The Unstoppable iPhone

After selling more than 14 million iPhones from July through September, Apple topped that by selling more than 16 million iPhones during the holiday quarter, and they could have sold more. More than six months after launch, the iPhone 4 is still supply-constrained, and Apple executives have no idea when supply and demand equilibrium will be reached.

It almost certainly won’t be this quarter, with the launch of the Verizon iPhone. In fact, a question regarding expanding sales of CDMA iPhones to countries like China was only partially deflected. While Apple is “always looking for opportunities,” it was implied that current iPhone supplies preclude any major expansion in the short term. For the first time, Apple may be looking at an iPhone that sells out across the model year.

5. Other Tablets Still Suck

Trash-talkin’ Steve Jobs may not have been there to put the smackdown on competing tablets, but Tim Cook filled those shoes admirably. According to Cook, competing tablets currently fall into one of three categories:

1. Window tablets that are “big, heavy, expensive, and have poor battery life,”and that require input devices like a stylus. Consumers are simply “not interested.”
2. Android tablets that, by Google’s own admission, run an OS not designed for tablets in sizes that are “less than reasonable,” failing to provide a “real tablet experience.” They are “scaled-up smartphones” and Apple is ”not concerned” about  them. I wouldn’t expect a 7-inch iPad this year.
3. Vapor. That would be tablets previewed at CES or earlier, and possibly the BlackBerry PlayBook, though RIM was never mentioned.

6. 160 Million iOS Devices Sold

To put that number in perspective, the number of iOS devices passed 100 million last June. In September, that number was 120 million, and now it’s 160 million. By the time the next iPhone launches in June or July, it will be at least 200 million, perhaps as many as 250,000 million.

That’s the takeaway from this quarter’s conference call: six facts worth remembering.

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Jobs began the Apple earnings conference call today by going on a tear against two of his biggest competitors, Google and RIM. Apple “handily beat RIM,” with 14.1 million iPhones sold last quarter, versus 12.1 million BlackBerry devices, and Jobs doesn’t “see them catching up.” According to Jobs, RIM must move from its “comfort zone” of the enterprise, and woo both the average consumer and developers, and it will be a “challenge.”

Regarding Google, Jobs once again challenged the search giant on Android sales data. Not only did he question the reliability of Google’s claim of activating 200,000 Android devices a day, but he also countered that in the last 30 days Apple was selling an average of 275,000 iOS devices, with a peak of 300,000.

Fragmented vs. Integrated Platforms

In terms of platform philosophy, Jobs went after Google for calling Android open and iOS closed, arguing the difference was between a fragmented and an integrated approach. He complained about “proprietary interfaces” added by companies like Motorola and HTC.

He contrasted iOS as a development platform with only two versions, with Android which has more than 100 on more than 200 handsets. Jobs contends that customers and developers want devices that “just work,” and he’s confident that his “integrated” platform will triumph over a “fragmented” one.

Quality Control

Jobs also took a shot at Nokia, saying Apple doesn’t “know how to make a great smartphone for $50.” Apple approaches product design from what’s best for the consumer, not necessarily what will sell the most, though Jobs pointed out that Apple did both with the iPod.

On tablets, Jobs adamantly defended the 10-inch form factor, arguing that a 7-inch screen just “isn’t sufficient to create great tablet apps.” According to Jobs, “10 inches is the minimum size for a great tablet,” which notably does not rule out larger displays.

Jobs further argues that competitors can’t match Apple on pricing, have zero apps for their tablets, and may end up abandoning the 7-inch model next year, leaving customers with “orphaned product.” He summed up his thoughts on the tablet platform succinctly: “We’re out to win this one.”

Apple TV

Breaking with three years of tradition on refusing to report sales of the Apple TV, Steve Jobs announced Apple has sold 250,000 since the device went on sale at the beginning of the month. If those kinds of numbers persist, it’s hard to imagine Apple not introducing an App Store for the Apple TV.

Everything Else

Another high point in Jobs’ performance: When asked about his feeling on Flash, he replied, “Flash memory? We love flash memory.”

Here are some other highlights that aren’t quite as theatrical, but are impressive nonetheless:

• Macs are more than doubling the growth of the PC industry average of 22 percent thanks to strong iMac, MacBook and MacBook Pro sales.
• Despite decreasing sales, the iPod continues to represent about 70 percent of the media player market in the U.S., and is the top-selling device internationally in most markets.
• The iPhone had a blowout quarter with more than 14.1 million units sold, up 92 percent year over year, compared to 64 percent for the industry average. It’s now available in 89 countries, and being piloted or deployed by 80 percent of Fortune 100 companies. While there’s still a “sizable backlog” of orders, supply/demand equilibrium is getting closer.
• The iPad is being met with “great enthusiasm” in 26 countries and 66 percent of Fortune 100 companies. Supply channel inventory is now 3 to 4 weeks, less than the 4 to 6 desired, but enough so that additional partners and countries can start to sell iPads.
• Sometime in September, the 125th million iOS device was sold, up from 100 million in June, meaning Apple is now tracking at 100 million iOS devices sold per year and growing.
• Retail saw nearly 75 million visitors, up from 50 million a year ago. 874,000 Macs were sold at 317 Apple Stores worldwide, “about half” to those new to the platform. The company plans to open between 40 and 50 new stores in 2011.

Finally, Apple has $50 billion in the bank, up $5 billion from last quarter. Rather than return the money to shareholders as dividends, Jobs said Apple plans to “keep our powder dry” for “one or two” possible strategic acquisitions in the future. Nintendo looks quite ripe, doesn’t it?

As conference calls go, this one was just about the best ever. Check out the audio for yourself if you don’t believe me.

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1) Apple’s Fab Four: Revenue Breakdown by Major Product

Sure, the iTunes Store earned over a billion dollars, and other hardware and software accounted for about $2 billion this quarter, but so what? That’s what the iPad earned in its debut quarter, or about one out of every seven revenue dollars. The “three-legged” revenue stool just became a four-legged comfy chair.

2) Not surprisingly, Apple announced the hundredth million iOS device (iPad, iPhone, or iPod touch) was sold sometime in June. RIM announced the same thing for BlackBerry OS in June, but what’s interesting is that RIM has been selling the BlackBerry since 2002. The first iOS device, the iPhone, went on sale in June 2007.

3) A new record was set for revenue, but not the $15.7 billion Apple earned for the June quarter, though a record it was. This Thursday, Microsoft is expected to report earnings of $15.27 billion. Can you hear the chairs whizzing through air in Steve Ballmer’s office?

4) A new record was set for Mac sales, some 3.472 million Macs sold during the June quarter, up 33 percent year-over-year. The Mac not only out-paced the growth rate for PCs, around 20 percent, but saw insane growth in Europe, 46 percent, and even more insane growth in Asia, 71 percent.

5) “Antennagate” came up once directly, and once tangentially. First, iPhone 4 returns continue to be “less than the iPhone 3GS,” and for that “specific issue” they are “extremely small.” Second, Apple is projecting a $175 million “free bumper” deferral to revenue for the holiday quarter.

6) Apple execs continue to ignore and obfuscate regarding the threat of Android, saying only that the iPhone is “growing substantially faster than the market.” Well, Google is allegedly activating 160,000 Android phones a day, and growing substantially faster than the iPhone, around 93,000 a day over the last quarter.

7) Speaking of that iPhone growth issue, once again, when asked about exclusivity and AT&T, Apple execs said, “we won’t get into what we will or won’t do, but we’re very happy to be with AT&T.” I swear I heard teeth grinding.

8) More than 60 million people visited 293 Apple Stores last quarter, spending $2.68 billion. They purchased, among other Apple things, some 677,000 Macs. That’s about one out of five Macs sold, and “about half” of the buyers had never previously owned a Mac.

9) Apple now has $45.8 billion in cash, enough to pay for the Olympics in Beijing, bailout Greece, buy Warren Buffet, or every Apple fan’s dream, Nintendo.

10) On the issue of the iPad cannibalizing the Mac, it was suggested instead that a kind of “synergy” could happen. Looking at the iPod, it was “felt the iPod created a halo for the Mac,” as “iPod volumes took off, you see a dramatic change in Mac sales back in time.” And people thought Apple forcing the iPad to be tethered to a computer was a mistake.

And just in case the iPad does cannibalize Mac sales,”it’s great to have a lower share.” Seriously, that’s what was said in response to another question about the iPad and Mac sales. “If the iPad cannibalizes PCs, then that’s fantastic for us, because there’s a lot of PCs to cannibalize.”

Who knew Apple losing the PC wars could have been so fortuitous.

The “future product” could be the new iPhone, which is expected to launch in June. As for the portables, while the MacBook Pros were just updated, the MacBook awaits a refresh, as does the MacBook Air, assuming it’s not discontinued.

Besides that enigmatic statement, there were more than a few interesting questions and answers for this call.

The iPad was a popular topic. While units sold wasn’t updated at the call, next quarter iPads will be reported as a “line item on our data summary,” meaning units sold and revenue. That’s a clear indicator of success. More concretely, the iPad 3G will ship on April 30 in the U.S., and come to nine additional countries in May. There are more than 5,000 accessories compatible with the iPad, and more than 3,500 specific apps for the iPad. Price came up more than once, which Apple considers to be “aggressive” on the iPad. Nonetheless, regarding price cuts, the reply was “nothing to announce today.”

It was just so awkward hearing someone praise AT&T.

In an awkwardly answered question about iPhone exclusivity, it was admitted that multiple carriers increases units sales and market share where it’s done, but that “the formula doesn’t work in every single case.” Also, AT&T has made some “big strides” in network improvement. Good grief, why not just admit AT&T pays more per phone than Verizon ever will and be done with it. It was just so awkward hearing someone praise AT&T.

Speaking of awkward, in response to a question about whatever happened to the Apple TV, it was stated sales are up 34 percent YOY, but that’s still a “small” number that we will likely never learn. There was a little rationalizing about how the Mac and the iPhone compete in much larger markets, hundreds of millions of units sold per year, so that’s why the Apple TV remains a “hobby” for Apple. Note to Apple: 200 million televisions were sold last year.

Additional random bits:

• Not much was said about the Mac, except that you can forget about a MacBook mini because Apple executives can’t think of “a single thing” a netbook does well.
• As for the iPod, as noted, while sales were flat, revenue was up. That’s because the iPod touch saw 63 percent sales growth.
• Apple still owns about 70 percent of the media player market.
• Half of people buying Macs in Apple Stores continue to be new to the platform.
• There are now 286 Apple Stores, which saw 47 million visitors last quarter.
• Apple expects to open 25 Apple Stores in China, up from two, by the end of 2011.
• Apple has $41.7 billion in cash on hand, enough to purchase Adobe twice over and put an end to Flash without the passive-aggressive behavior.
• Apple considers the advertising initiative iAd a “toe in the water,” or possibly in Google’s eye, depending on how you look at it.
• As always, the company is excited about the “product pipeline.”

Overall, a great quarter and a pretty good conference call. I’m looking forward to “future product transitions” for all.

Peter Oppenheimer and Tim Cook hosted Apple’s third-quarter fiscal 2009 conference call, the “best non-holiday quarter ever” for revenue, and the second-best quarter for Mac sales.

For investors, if you didn’t suffer through the conference call, transcripts will appear sooner or later, but within the dry financial data there were few interesting facts for consumers. I counted three.

Slapping the “Pro” moniker on the 13″ unibody MacBook was a brilliant idea.

While no figures were released, portable sales saw a 13 percent increase year-over-year, and an “acceleration of sales” after the new laptops launched at WWDC. The response to the 13″ MacBook Pro has been “very favorable.” The point was made that previously you had to pay $2,000 for a pro laptop, but now pro machines start at only $1,200. Before the transition, the white MacBook was the leader in consumer sales, but now the 13″ MacBook Pro is selling fast enough to constrain supply.

Apple is OK with declining sales of “traditional” iPods.

The company is “cannibalizing” itself — surely there is a better metaphor — by upselling consumers from Shuffles, nanos, and Classics to the iPod touch and iPhone, though how that would account for an overall decline in iPod sales of 7 percent year-over-year was not explained. Nonetheless, it was announced that iPod touch sales are up 130 percent year-over-year. Based on a comment about “45 million” iPhone OS 3.0 users, we can subtract 26.38 iPhones sold to date to arrive at some 18.62 million iPod touch users. Clearly the iPod touch is becoming as important to Apple as the iPhone. It wouldn’t be surprising if rumors of a new iPod touch ushered in a segmentation of models and a price drop, like the iPhone 3G and 3GS, probably at an Apple Event in the fall.

Apple still hates netbooks.

Tim Cook deflected a question about a device with a “larger screen where you can do more than on the iPhone” using the same talking points: slow, cramped, small keyboards and displays. While not wanting to “discount anything in the future,” the company does not “see a way to build a great product for this $399, $499 kind of price point.” Apparently people who buy netbooks often become “disenchanted,” and most want “full-featured notebooks.” That may be true, but considering Toshiba and Acer both saw double-digit jumps in market share last quarter, clearly there is strong demand for netbooks.

Let’s hope that if no MacBook mini is on the horizon, there will soon be a fabulous tablet device that will be the subject of next quarter’s conference call.

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Last time around, Apple had yet another record-breaking quarter ($10.1 billion revenue, $1.78 in earnings per share), exceeding the estimates of Wall Street and observers, and beating their performance in the same period the previous year by a fair margin. They downplayed their expectations for the second quarter on that call, which is something they always tend to do, but Wall Street expects them to perform well, with $1.13 in earnings per share and $8.2 billion in revenue.

We should see at this conference call what effect Apple’s recent desktop update has had on sales figures, and also get a better idea of the toll the recession is taking on the company, which has appeared to be rather resistant to its effects. You can bet that investors will also be watching closely because of Steve Jobs’ continued absence, which is beginning to look like less and less a factor in the company’s success, since the stock (AAPL) is performing well. Some analysts are even going so far as to claim that Apple is better off without him at the helm. Be sure to check back for a follow-up on April 22 from us here at TheAppleBlog for all the details.

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We Love the $199 Price Point

On the subject of iPhone pricing, Tim Cook, Apple COO standing in as CEO while Jobs is recuperating, made clear that their $399 and $199 price points were working well for the company. Quite specifically, he emphasized the company’s love for the $199 price point, which is clearly leading to high sales numbers. Interestingly, he didn’t talk about storage size, just pricing.

We could see a pricing move based on strong sales and a shrinking consumer smartphone market that may result in a $199 price point for the 16GB iPhone to stimulate sales. Whether this also leads to a lower cost 8GB phone or a 32GB model, I can’t guess, but we will mostly likely see a pricing change when sales start to dip.

We Have Some Ideas, But Right Now We Think Those Products Are Inferior

The netbook saga/flirtation/denial continues. They’re spot on about the hardware deficiencies when they point out that the keyboards on these devices are still too small, and about the software not being well-tailored to the platform as of yet. Which shows that they’re thinking much more deeply about those issues than the offhand remarks would seem to suggest.

Make no mistake, Apple is developing a device for this space. And they’ve targeted the specific issues their competitors have so far failed to address, which means they probably intend to come to the market late but with a superior product. This could be the reason they sought to separate “OS X” from the “Mac” moniker, if they’re preparing a version of the OS specifically designed to run on netbook hardware.

We Feel Extremely Good About Our Product Pipeline

This comment was made in reference to their projections about iPhone seasonality. They also made a followup comment noting that Apple has fear in terms of the danger of the economy affecting smartphone adoption, considering the higher monthly rates that come with them.

References to the product pipeline in this context are extremely tantalizing. What does Apple have in its pocket to offset the threat of smartphone contract prices? Two possibilities come to mind. Either they think that upcoming iPhone iterations will be impressive enough to attract consumers anyway, or they’re planning on moving away from the smartphone market to take advantage of lower contract costs. In either case, references to product pipelines should not be taken lightly.

That’s my take on some of the more salient points of the Q1 conference call, the content of which I reviewed thanks to CNNMoney’s transcript of their live blog of the event. You may think some of my predictions are reaching or far-fetched, but they all come from an analysis of the context within which the statements were made. Whether you agree with me or not, share you own interpretations below.

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We mentioned in an earlier post that the Mini hasn’t seen an update since November of 2007, and it shows its age in hardware specs. Slower processor, slower wireless networking, and dismal integrated Intel 945GM graphics all stand as signs of an old work-horse put out to pasture. Or was it more of a pony?

Sales of the Mini exceeded expectations early on, but have tapered off more recently, to the point where the bare bones computer is the weakest link in Apple’s chain of Mac offerings. When introduced at Macworld 2005, it was positioned as a key weapon in the battle to convert Windows users, since it was affordable and could easily be swapped into an existing PC set up in place of a Windows-based tower.

Many users have found a place for the Mini as an effective home theatre PC, since it offers similar functionality to the Apple TV while providing the expanded feature set of a computer, with a nearly identical physical footprint. The potential for the device to cannibalize Apple TV sales may have figured in the rumored decision to axe it.

Gizmodo’s Jesus Diaz suggests the product line’s demise could be announced as early as the Q4 Earnings conference call happening today at 2:00 PT/5:00 ET, so if you’re interested in the fate the once mighty box, tune in here for the webcast.

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