"we continue to believe there is more cannibalization of Windows PCs by the iPad"
I can't point to a single person who bought an iPad INSTEAD of a PC and I've actually tried to convince a few people to do exactly this. Everyone I know who purchased an iPad purchased it as a device to complement their PC (invariably a Windows PC). While they use their PC far less frequently than they used to (as do I) it has been a hard sell to have the iPad completely replace a PC. I know that I've been unable to do it yet.
Apple posted record sales numbers for its iPhone, iPad and Mac units — but CEO Tim Cook talked up these and then some during the quarterly conference call with investors on Tuesday. Here’s a rundown:
See also: Apple: 37.04 million iPhones sold in Q1
Apple’s Q1: The iPhone 4S will carry the day
iPads
Cook didn’t exactly have fighting words for any tablet competitors, but it didn’t seem like Apple is really worried about anyone else just yet — even with the success of Amazon’s Kindle Fire, the $199 tablet released in November.
In response to a question about whether or not Apple is actually benefiting from lower-cost tablets on the market (meaning, are prospective iPad customers not finding what they want on sub-$200 tablets, so they opt to pay more for the iPad), Cook said that there “was no obvious change” based on looking at U.S. data in the last month.
However, PC makers might be in the firing line. Reaffirming that the iPad presents a “huge opportunity for Apple over time,” Cook posited that “there will come a day when the tablet market is larger than the PC market.”
“There is a cannibalization of Macs by the iPad, but we continue to believe there is more cannibalization of Windows PCs by the iPad,” Cook argued, “You can see it beginning to appear virtually everywhere.
Also boasting that the “ecosystem for the iPad is in a class by itself,” Cook explained that “people really want to do multiple things with their tablets, so we don’t see these limited-function tablets and e-readers being in the same category.”
Hard drive shortage
On the same day that it was announced that Apple became the leading semiconductor company in 2011, talk about the hard drive shortage also inevitably popped up.
On the surface, it would seem based on Mac sales last quarter (approximately 5.2 million units) haven’t been tainted just yet by the worldwide shortage following flooding in Thailand last year.
“For the December quarter, there was not a material supply or cost impact to any of our product lines,” Cook said. “For the March quarter, we’re not expecting any impact, but hard drive area prices have increased, and we included those increases in our guidance.”
Cook also noted that Apple “did receive better costs than we had enrolled in our guidance, particularly on displays,NAN flash and DRAM” than expected, affirming that “those prices trends should continue to be favorable this quarter.”
iPhones
The heroes of the quarter, led by the iPhone 4S released in October. Sales toppled an incredible 37.04 million iPhones sold — a 128 percent increase over the first fiscal quarter of 2011. The global roll out for the iPhone 4S was faster than any of its predecessors (already available in 90 countries), and first quarter results don’t even include China as the 4S just made it there this quarter.
Cook commented that Apple execs thought they might have been too bold entering the first quarter as to what the demand would be.
“As it turns out we didn’t bet high enough,” Cook said, explaining that Apple was short of supply throughout the quarter and did end with a significant back log in certain “key geographies.” However, Cook did not specify as to where, but 4S sales were strongest in the U.S. and Japan.
He did point out that Apple “made correct decision to go with a broad range of iPhones.” Thus, we can probably see the continuance of the iPhone 3GS and iPhone 4 for some time to come.
Side notes:
- iPods: Although analysts seem worried about this unit — which is not surprising considering it was the only one that saw a decrease in sales — Apple doesn’t seem to be giving up here just yet. The iPod still leads as the top MP3 player brand in the world, and there are a few products here that really fulfill some voids (such as the iPod shuffle.) Cook also touted, “There’s really no comparable product to the iPod touch out there.”
- Apple TV: This little guy was a bit forgotten this quarter, although it, too, posted a record number for sales at 1.4 million units during the last quarter. Unfortunately, what we all really want to hear more about is the future of Apple TV and if/when we are going to see that fully-fledged television panel from Apple, rumored to be unveiled in late 2012 or 2013. As for anything else Apple TV-related, Cook had “no other comment.”
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