Peter Kafka

Recent Posts by Peter Kafka

"We Sold Every iPad 2 We Could Make"

No surprise that Apple posted another blowout quarter. But Apple’s earnings report did contain at least one wrinkle — an iPad sales number well below what Wall Street was looking for.

Apple sold 4.7 million iPads in the first 3 months of this year — enough to generate $2.8 billion in revenue. But that number is more than a million units short of what Wall Street’s consensus of 6.2 million (via Piper Jaffray).

What happened?

Apple chief financial officer Peter Oppenheimer won’t spell it out in his remarks, but is basically arguing that Apple couldn’t make enough. In his prepared remarks, he said the company is “thrilled with the momentum for iPad,” and is seeing “very robust demand for iPad.”

“Customer enthusiasm has been tremendous for ipad 2, and we’re working as hard as we can to get into their hands as fast as possible,” he added. “We sold every iPad 2 that we could make.”

The iPad numbers led some people to immediately conclude that the Japanese earthquake affected Apple’s supply chain, but COO Tim Cook says that’s not the case.

Cook said Apple “did not have any supply or cost impact” from the disaster in the last quarter, and doesn’t anticipate any for the current quarter.

Still, Cook said, Apple can’t rule out another iPad supply issue this time around. “I am confident we’re going to produce a very large number for the quarter,” he said. “Whether that will be enough to meet demand, I don’t know.”

Cook went into a bit more detail about the iPad shortage problem, and I’ll add that in when I can get to my notes. But here’s his most concise description: It’s the “mother of all backlogs”.


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