The difference between Apple (NSDQ: AAPL) and those chasing it in the nascent tablet market couldn’t have been more clearly illustrated than they were by company executives Wednesday during a conference call discussing the company’s blowout earnings: Apple’s problems are the exact opposite of those facing everyone else.
Simply put, Apple can’t make enough iPad 2s to satisfy demand, which put a slight damper on the company’s quarterly earnings call. Not much of a damper, truth be told: Apple posted huge increases in revenue, profits, and iPhones sold during the first quarter of the year as it continued to demonstrate why it is arguably the best-performing company in the technology sector. But it goes to show how much Apple has the market to itself at the moment, when its biggest obstacle to serving more customers is its own supply chain and distribution channels.
“We sold every iPad 2 we could make” during the quarter, said Peter Oppenheimer, Apple’s chief financial officer. Tim Cook, Apple’s chief operating officer and the man in charge while CEO Steve Jobs is on medical leave, said he was “very confident we can produce a large number of iPads for the (current) quarter,” not even mentioning any potential effect from competitors to the iPad 2.
Compare that discussion with those happening at Research in Motion (NSDQ: RIMM) this week, where co-CEOs Mike Lazaridis and Jim Balsillie have taken to pumping up demand for the newly launched Playbook by focusing on relationships with major corporations and wondering aloud why their company doesn’t get any respect. Or those happening between Google (NSDQ: GOOG) and its tablet partners, who have had a rocky couple of weeks following allegations that Google was seeking tighter control over how those partners implement the Android software.
Apple, on the other hand, is scrambling to make sure it has enough units on hand to not disappoint customers. It’s always tricky to know exactly how a consumer electronics product company has planned for a product launch, and while it’s possible Apple was too conservative leading into the iPad 2 launch it’s hard to reflexively fault a business for being slightly cautious with its outlook. There’s no doubt Apple loves to see lines outside its stores amid major product launches, but it would probably rather convert those people into profit as fast as possible.
Such is the state of the world for Apple these days. Even though sales of 4.69 million iPads were lower than some financial analysts had hoped, no other tablet is selling in volumes even approaching that of the iPad, unless Motorola (NYSE: MMI) has a huge surprise up its sleeve regarding Xoom sales during its own earnings conference call next week.
That means that once Apple works out the kinks in its supply chain (Cook said Apple did not experience any disruption in its supply chain from the ongoing tragedy in Japan over the last month, and the company doesn’t anticipate problems in the current quarter) that Apple is likely to maintain its position in the tablet market over the rest of the year. Even optimistic estimates for sales of RIM’s Playbook this year hover around 3 million units for the entire year, and Apple just sold more than that in a quarter during which it couldn’t meet demand and in which sales slowed ahead of the widely expected iPad 2 launch event.
The tablet market is still Apple’s to lose in 2011 and the company appears to be taking steps to make sure that once the first-on-the-block crowd dies out, anyone who wants an iPad 2 will be able to get one. Already the waiting period for an iPad 2 from Apple’s online store has decreased from two to three weeks to just one or two weeks.
It’s likely that at some point, a smart and stylish tablet will emerge from the pack chasing Apple and start to make real headway against the iPad. But app developers and publishers wondering which tablet to support as we head into the middle of the year won’t have a very difficult decision to make, meaning that Apple’s advantage over its competitors will continue to strengthen as the mobile industry plans its tablet strategies around the iPad.