As it happens, the report came a week before chipmaker Intel is due to report quarterly earnings on April 16. In a research note today, Stacy Rasgon of Sanford Bernstein sized up its prospects for the quarter and the rest of the year.

There’s a chance that the actual on-the-ground results may yet be worse than what the research firms detected. Relying on data from Taiwanese notebook manufacturers including Compal, Quanta and Wistron, sales were down in the first quarter by more than 18 percent, worse than the 11 percent to 13 percent drop reported by Gartner and IDC.

So what does that mean for Intel, the world’s largest supplier of computer chips and long considered an important bellwether of the overall tech economy? Nothing good, Rasgon argues. He expects Intel to report revenue of $12.43 billion, nearly $200 million below the consensus expectation of $12.6 billion. He expects earnings on a per-share basis to be 41 cents.

“Given the recent atrocious PC numbers, we believe investors may not be hugely surprised by weak outlook at this point (at least, they certainly shouldn’t be now),” he wrote.

Other key questions for Intel: Who will be the next CEO? And will Intel say anything about it on the conference call after earnings are announced? If you haven’t been keeping track, here’s a good rundown on who’s likely to be in the race, both internal and external. (Here’s a hint: It’s going to be an internal contender; Intel has never hired an outside CEO.)

“It is rapidly approaching high time for the company to provide color on a replacement,” Rasgon wrote. “While it appears they are actively vetting both internal and external candidates, we do not expect significant strategic changes regardless of the eventual choice as they have started the ball rolling on several initiatives that would be difficult to stop. … We would hope (but do not necessarily expect) that the company could provide additional information on the succession plan.”

Pres Panayotov / Shutterstock.com

Is News Corp. really going to yank Fox off the airwaves in response to Aereo?

Snap consensus judgement from the various corners of the TV Industrial Complex: No way. At least, not anytime soon.

People I’ve talked to who work in TVland think that News Corp. COO Chase Carey’s comments are just that — comments, not a plan.

It’s possible that over time, if broadcasters do think that Aereo or Aereo-like technology really threatens the fees they get from pay TV operators for their over-the-air programming, they’ll move more of it to cable networks. And, in fact, programmers have already started moving lots of high-profile sporting events from free TV to pay TV.

Near-term, however, people seem to think that both practical and legal restrictions — for instance, deals that Fox and CBS have with the NFL for football broadcast rights — would prevent this from happening. More important: There isn’t any reason to do so right now, since only a handful of people are actually using Aereo to get broadcast TV for free.

All that said, Wall Street seems to like the idea.

Earlier this year, Bernstein analyst Todd Juenger gamed out a scenario where all four broadcasters moved from over-the-air to pay networks, and concluded that it wouldn’t be a terrible idea, at least financially. By Juenger’s thinking, the lost “retransmission fees” and advertising dollars the broadcasters would lose from over-the-air programming would be replaced by even higher “affiliate fees” and advertising dollars they could get on cable.

And Juenger thinks that move might benefit pay TV distributors, too: “There is enough logic here to suggest it wouldn’t be completely crazy for a cable operator to make a pre-emptive offer to broadcast networks in a given market to convert to a cable model.”

In any case, for whatever reason, TV investors are cheering Carey on. Look what happened to shares at Fox owner News Corp. (which also owns this website), ABC owner Disney and CBS this afternoon after 1:30 pm ET, when Carey made his remarks at an industry conference:

The outlier here is NBC owner Comcast, whose shares also moved up after Carey’s remarks, then down again. Perhaps some investors are less comfortable with what this means for America’s biggest pay TV operator.

(Image courtesy of Pres Panayotov / Shutterstock.com)

Except that’s not true at all: The Web offers advertisers a slew of creepily effective targeting mechanisms, but they only work for some stuff, some of the time. An ad on the Web may do a better job of reaching its audience than, say, a magazine ad. But that doesn’t mean it does a good job.

Example: Here’s data from Nielsen, via Bernstein analyst Carlos Kirjner, which tracks the accuracy of a recent ad campaign by “a manufacturer of women’s personal care products.” It was supposed to target women between the ages of 25 and 54. But most often it didn’t — the most accurate publisher got the ads in front of the right people 40 percent of the time. Overall, the campaign only hit the target 25 percent of the time. And nearly half the time — 47 percent — the ads got served to men.

Kirjner uses the anecdote to bolster his bullish case for Facebook, which he thinks can do a much better job of targeting than regular sites can, because it knows so much more about its 800 million-plus users.

Maybe. I’ve noticed that Facebook has stopped sending me ads that offer to get me a job at the CIA, or to meet Christian singles in my area, so that’s good. Right now, it’s showing me a banner for the McDonald’s Angus Deluxe, which is more accurate, since I do like food. But not that food.

The Web’s sorta-close, sorta-not targeting problem hasn’t hampered Google, obviously. But that’s because Google’s search ads respond directly to your input and your intent. Now, Facebook, Google and everyone else are going after the branded ads that dominate TV, where the really big money lives. And if they want to get bigger bites of that, they’re going to have to get more accurate.

“We believe all six devices will be competitive in the marketplace from both hardware and pricing standpoints,” the research outfit’s Nokia team wrote. “We have been positively surprised by the large number of wireless operators involved in the Lumia’s launch (an average of 5 per country where the device will be launched in Western Europe this quarter).”

So, good news for Nokia, and a good start.

Or not.

Because over at Bernstein, they’re taking a very different view. There, analysts are saying there’s really nothing to differentiate the Lumia from the competition. Worse, at the high end of the line it’s overpriced and at the mid and low ends it’s got a “cheap build.”

“This new product portfolio appears worryingly uncompetitive,” says Bernstein analyst Pierre Ferragu, adding that because of its $580 price point the Lumia 800, Nokia’s hero device, will be hobbled at launch. “This phone is condemned to be either anecdotic [sic] or go through massive price cuts in the next 6 months.”

If that’s to be the fate of its marquee handset, Nokia has another tough year ahead of it battling it out with the iPhone and Google’s Android army.

“This product portfolio has only a limited chance of regaining ground against two operating systems that take 85 percent of the high smartphone market, particularly as the price points appear uncompetitive at present,” Ferragu concludes. “I now believe the company is unlikely to see a meaningful change in trends as it launches these products. Initial shipments may have only a limited impact on shipments and gross margins, but we would be surprised to see a lasting positive effect.”

So two divergent views. New dawn or dawn of the dead. For Nokia’s sake, let’s hope it’s the former.

Perhaps, but not for much longer. Smartphone sales down by a third. Overall sales of core devices and services down by 23 percent. Precipitous market share losses like these suggest Nokia’s window of opportunity here — if one even exists — is closing.

Nokia is back.

Nokia EVP Niklas Savander, 2010

Going forward, execution is critical. Nokia is racing to ship its first Windows phones in the fourth quarter in a bid to rebuild market share. But as Bernstein analyst Pierre Ferragu observes, pulling that off is not a guarantee of future success.

“In a fast changing market, Nokia is losing ground very rapidly,” Ferragu says. “The company lost significant market share again in the second quarter, 7pts in smartphones and 6pts in basic phones. The collaboration with Microsoft now appears to us unlikely to be successful, as Nokia’s brand is losing ground too fast. … Android has been clearly identified by management as being the major driver behind the current negative trend of Nokia, especially in Europe. The operating system grabbed 36 percent market share last quarter vs. 11 percent a year ago and we are concerned that against such momentum, no third ecosystem will have a chance to emerge.”

Evidently the ugly financials the company reported last week and the obliviousness of its leadership inspired him to reassess that call. “We cautiously upgraded RIM to market perform 4 weeks ago, strongly convinced that a scenario driving $4 of annual earnings wasn’t likely in the next 12-18 months,” Ferragu said today. “We visibly got it wrong as it actually materialised in 3 months.”

RIM may be having trouble getting its new BlackBerry 7 handsets to market on time, but its decline is running well ahead of schedule.

In North America, for example, RIM’s market share has gone from 54 percent in the first quarter of 2009 to about 11 percent this quarter.

That’s a grotesque downward spiral and one that Ferragu says the company’s going to have trouble pulling out of. RIM’s continuing product delays have left it in crisis, without a competitive lineup of products. And, according to Ferragu, QNX — the new platform on which RIM’s “superphones” will run — is taking far too long to bring to market to save it.

“We believe the QNX strategy isn’t good,” Ferragu says. “In today’s ecosystem war, first mover advantage is key, and with a first phone hitting the market in 2012 only, QNX is unlikely to gain critical mass soon enough to be a viable alternative. In a best scenario, from the first phone shipped, we would expect RIM to require an iteration or two get to a competitive phone and a year or two before gathering enough developer traction around its ecosystem. By then, we expect Apple, Samsung and HTC to control over 80 percent of the market. The very slow start of Windows 7 is the best sign that the window of opportunity for an additional ecosystem to ramp-up is closing fast.”

As I said back in May: Could be worse, could be raining …

Nokia faces some very significant challenges. The game has changed from a battle of devices to a war of ecosystems, and competitive ecosystems are gaining momentum and share. The emergence of ecosystems represents the broad convergence of the mobility, computing and services industries. In short, our industry changed, it’s time for Nokia to change faster.

–Nokia CEO Stephen Elop

The transition from Symbian to Microsoft’s Windows Phone platform is one of the more challenging parts of Nokia’s new mobile alliance with Microsoft. Implementing a new strategy like this takes time, something that’s in short supply in the fast-moving mobile market. And with Nokia complicating its roll-out with joint product roadmaps and shared responsibilities, some observers are beginning to wonder if the company will suffer more smartphone market share losses before it enjoys any gains–if it enjoys any at all.

Bernstein analyst Pierre Ferragu says he expects Nokia to lose 2 points of market share sequentially in smartphones in the first quarter. And he thinks that trend will likely continue in the quarters that follow, and perhaps even accelerate.

That might seem an overly-pessimistic view of Nokia’s situation, but Ferragu has his reasons, top among them the belief that Nokia’s alliance with Microsoft won’t solve the company’s fundamental problem: the lack of innovation and agility fostered by an overlarge company hamstrung by bureaucracy.

“For a company unarguably overstaffed, with an over-engineered organisation, a lack of reactivity clearly acknowledged by management, a partnership with another heavy giant doesn’t sound like the right remedy,” Ferragu argues, noting that Nokia’s worst enemy going forward is time. “The partnership with Microsoft will first take time to implement. Even if the largest areas of the partnership seem to have been decided, a few more months to agree on the details seem a minimum. Moreover, comments made by management [recently] on how the partnership is likely to work are not reassuring: joint product roadmaps, interactions at all layers of both organizations, interlocked areas of responsibilities. All these elements point at likely slower decision making processes and higher risk on the quality of decision made.”

Not the best spot to be in when your leadership position has been eroded by the likes of Apple and HTC, which earlier this month surpassed Nokia in market cap.

Analysts at Bernstein Research are offering a different take. They argue that passage of the deal may well lead to less competition and higher prices. However, they say that’s not such a bad thing.

The firm notes that American wireless firms have lower profit margins than their European counterparts and that consumers here consume twice to three times as much data, but pay only half or a third as much per megabyte for that data.

“Given the economies of scale of wireless, the constraints of CEOs and historic decisions with regard to spectrum, only further consolidation of the U.S. market is likely to deliver better infrastructure and lower prices,” Bernstein said in a report. “In short, more wireless competition may (though there is no guarantee of this) deliver lower prices near term, but it will almost certainly deliver lower quality infrastructure.”

The surest path to higher quality, the firm reasons, is consolidation.

“If U.S. regulators want to redress the lamentably lousy wireless service Americans receive, one of two things must happen: U.S. operators must be able to reduce their cost to serve (probably through consolidation) or Americans must pay more per unit consumed,” Bernstein’s analysts say in the report. “If the ‘Just Say No crowd’ gets their way, they may well end up with cheaper telephony near term (although this is far from certain), but they will certainly receive a poorer wireless service.”

It’s an interesting argument, though probably not the one we will hear from AT&T as it lobbies for government approval of the deal. Both the Federal Communications Commission and Department of Justice have to sign off on the transaction, while several state attorneys general have said they are looking into the matter. Sprint has also vowed to fight the deal.

In a research note this week, Bernstein analyst Toni Sacconaghi reviewed a few of the more plausible ones, which run the gamut from the long-rumored iTunes streaming service to the back end for a natural language voice interface and navigation service for its iOS devices.

The first: an easy way of scaling the company’s iAd mobile advertising program. With its installed base of iOS devices likely to hit 200 million by the end of fiscal 2011, iAds could put quite a strain on Apple’s ad serving capabilities. Says Sacconaghi, “If iAd gets traction while serving interactive, multimedia ads then Apple’s underlying advertising platform will need to be significantly larger, and at a scale comparable to Google’s or Microsoft’s ad platforms.”

The second is a no-brainer and seems fairly likely to pan out given recent chatter about Apple’s MobileMe service going free come April: an overhauled verision of MobileMe that provides improved cloud-based synchronization of data and media, along with meaningful storage capacity.

The low-cost iTunes subscription service we’ve been hearing about for years now is the third. Again, this seems a completely plausible use for Apple’s new data center, and as Sacconaghi notes, the time may finally be right for the company to launch it. “In our meeting with Apple executives last month, VP of Internet Services Eddy Cue suggested that the reason that music subscription services had failed to receive traction with consumers was because they were too expensive, highlighting prevailing rates of up to $15/month,” he wrote. “We note that an annual subscription to Napster now costs $8/month, while the paid version – unlimited, higher-quality, ad-free – of music streaming from Pandora costs $3/month.” Add to that Apple’s 2010 acquisition of streaming music outfit Lala and the traction Spotify and Pandora have been gaining in the market recently and this seems a likely scenario as well.

Fourth on Sacconaghi’s list, an aggressively priced video streaming service. Given the popularity of Netflix’s iOS app among iPhone and iPad users, it might make sense for Apple to offer its own competing video subscription service. Or, it could simply acquire Netflix. It’s not like Apple doesn’t have the money to do it–even if Netflix’s market cap is north of $11 billion.

And finally there’s that voice interface and navigation service I mentioned earlier. This one might seem a stretch, but don’t dismiss it out of hand. Last April, Apple acquired Siri, developer of a virtual personal assistant supported by speech recognition, natural language processing and semantic Web search. And in 2009 it purchased PlaceBase, a mapping outfit that specialized in enhancing maps with private and public data sets. Put those two acquisitions together with a massive data center and Sacconaghi’s theory looks at least plausible.

“Apple could offer its own navigation service comparable to Google’s free and very popular voice-based navigation system on Android,” he writes. “The iOS device user-base could then potentially periodically upload anonymous information on routes travelled and speeds encountered, perhaps even in real-time, which would allow Apple to report back traffic conditions to its user-base.”

Sounds like a killer feature for the iPhone 5, doesn’t it?

PREVIOUSLY:

• Apple’s N.C. Data Center Intended for iTunes, MobileMe
• Apple Owns Another 70 Acres Near NC Data Center
• Was Apple Planning on Doubling Its North Carolina Data Center All Along?
• Apple Reaching for the Cloud With MacBook Air and N.C. Data Center
• That’s Apple’s New Data Center? Where’s the Giant Glass Cube?

The iPhone isn’t intended “just for the rich,” Cook said, remarking that Apple has some “clever things” planned to address the prepaid market and has no intention of ceding any smartphone market share to rivals. Add to this some related comments about the company’s focus on carrier expansion, particularly in poorer countries, and it’s pretty clear that Apple is developing a more affordable iPhone.

Just what sort of form it will take isn’t clear, though Sacconaghi suggests it may be a combination of less expensive hardware and better carrier rates, or even a move to disintermediate carriers with a soft-SIM.

That’s the theory put forth today by Bernstein analyst Toni Sacconaghi, who believes Apple’s market-share aspirations for the iPhone are a lot like those for its iPod business. Sacconaghi sees an iPhone Nano or Mini as an inevitability, one that would dramatically expand Apple’s addressable market.

“We are surprised that Apple hasn’t moved sooner to introduce a lower priced offering that could help secure a more dominant installed base,” Sacconaghi said in a note to clients today. “After all, the smartphone world is a platform war, where first mover advantage and scale matters. The dual facts that (1) iPhone has not been available at several very important global carriers and that (2) it carries a very high price point have contributed to creating an opportunity for Android that has been successfully exploited. Particularly with Android now outselling iOS, the imperative for Apple to expand its installed base has never been higher.”

A scaled-down version of the iPhone with a cheaper data plan–or one that required no data plan at all–is one very obvious way of doing that. Roll out a device like that with a street price that falls somewhere between $149 and $199, says Sacconaghi, bring it those carriers that don’t yet offer the iPhone, and mass-market adoption will follow. Serious mass-market adoption.

“It is difficult to estimate the size of a market for a product that we don’t yet know the form-factor or timing for. But as a rough guide, we estimate that at an end-user price of $150-$200 and no data plan contract, Apple could address potentially all of the remaining smartphone segment, the non-smartphone postpaid segment, and about 15 percent of the non-smartphone prepaid segment. This would amount to an incremental 700M+ units and $90 billion in revenue in terms of market opportunity; even if Apple succeeded in capturing just 5 percent of these incremental units, it would add $12+ billion in revenues and $4.50+ in EPS.”

Posting fourth-quarter earnings this morning, Sprint said it added 1.1 million total wireless subscribers, 58,000 of them two-year contract customers. Quite a milestone for a company that hasn’t seen a gain in postpaid subscribers in 13 quarters and a sign that Sprint may finally be turning a corner. Another good sign: Postpaid churn fell to 1.86 percent from 2.11 percent in the third quarter, and prepaid churn fell to 4.93 percent from 5.32 percent. And another: For the quarter, Sprint added almost 1.1 million wireless subscribers, its best showing in nearly five years.

All welcome news, even if Sprint is still losing money. The company reported a fourth-quarter loss of $929 million, or 31 cents a share, on revenue of $8.3 billion, up from $7.9 billion a year ago. Analysts polled by Thomson Reuters most recently forecast a loss of 30 cents a share on $8.15 billion in revenue. Said Bernstein analyst Craig Moffett, “Sprint CEO Dan Hesse might be forgiven for the temptation to hang a “Mission Accomplished” banner on the aircraft carrier that is Sprint. To his credit, he expressly declined to do so. Still, the company has at last achieved post-paid and total subscriber growth, customer service levels have improved, churn rates have been brought under control, and revenues were up.”

At $4.41, Sprint shares are up 1.15 percent in early trading as I write this.

Nokia faces some very significant challenges. The game has changed from a battle of devices to a war of ecosystems and competitive ecosystems are gaining momentum and share. The emergence of ecosystems represents the broad convergence of the mobility, computing and services industries. In short, our industry changed, it’s time for Nokia to change faster.

– Nokia CEO Stephen Elop

As Nokia CEO Stephen Elop said during the company’s Thursday earnings call, Nokia faces significant challenges in competitiveness and execution. And nowhere is that more clear than in its recent performance in the smartphone market. Nokia may be the world’s largest smartphone maker, but it’s also the world’s slowest growing. As Bernstein analyst Pierre Ferragu points out this morning, Nokia has been ceding ground precipitously on the smartphone front, with sequential smartphone growth that pales to that of its rivals.

In the November quarter, Nokia’s smartphone shipments grew 7 percent.

Meanwhile,

• Apple’s grew 15 percent
• Research In Motion’s grew 17 percent
• Motorola’s grew 29 percent
• HTC’s grew 34 percent

In the end, Nokia’s smartphone shipments grew at a slower pace than those of its feature phones. Which wouldn’t be so bad if growth in the feature phone weren’t slowing, but it is. Ferragu expects it to decline from 13 percent growth in 2010 to 5 percent growth in 2011.

If ever there was a time for “Nokia to change faster,” as Elop says, it is now. Otherwise…it has a future of continued weakness to look forward to. Says Ferragu, “For the next 12-18 month, there is only one thing we believe Nokia can do: brace. We believe it is difficult to anticipate how badly Nokia’s market position can deteriorate before a new strategy delivers improving fundamentals.”

That’s because the cable guys always raise their prices, year after year after year. It’s what they do. And the notion that some tech-savvy customers may be dropping their subscriptions in favor of some sort of Hulu/iTunes/Netflix broadband combo isn’t scaring them off.

The slightly less bad news is that it seems as if the price hike will be smaller than previous years’. But it will still be a hike. Bernstein Research’s Craig Moffett shows you how much more you can expect to pay depending on which company sells you your TV shows.

There are some caveats here. Because Moffett’s sample size is relatively small for Comcast and Time Warner Cable, those numbers could end up moving around. And the Dish Network hike looks a little bit outsized because the company has promised it will freeze rates for the two following years.

But the main takeaway doesn’t change: None of this looks like an industry convinced its customers are really heading out the door, or are about to in the next few years.

Good thing AT&T Wireless CEO Ralph de la Vega is so certain the end of the carrier’s iPhone exclusivity deal doesn’t portend a mass subscriber exodus, otherwise you might look at AT&T’s latest earnings and the degree to which they were driven by the device and (cough) worry.

Reporting third quarter financials largely in line with Wall Street’s forecasts, AT&T said today it activated 5.2 million iPhones in the quarter–62 percent more than the record 3.2 million it activated earlier this year. Odd then that the device is notably absent from the “Mobile Broadband Leadership” slide in AT&T’s investor presentation. A passive-aggressive jab back at that “rumored” Verizon deal, perhaps?

Anyway…

The company posted a profit of 55 cents per share, up 3.8 percent from the 53 cents per share it managed in the third quarter of 2009 and in line with what analysts had been expecting. Revenue rose to $31.58 billion from $30.73 billion in the same period a year earlier and slightly exceeded the average analyst expectation of $31.25 billion.

So a strong quarter, but one overshadowed by that long-rumored loss of iPhone exclusivity. As Bernstein analyst Craig Moffett observed in a note to investors this morning, the heavy subsidies AT&T offers for the iPhone cut deeply into its bottom line.

“In anticipation of losing exclusivity, AT&T has rapidly served up its own inoculation–a massive campaign to upgrade existing iPhone subscribers to new two year contracts that will lock them in as new options emerge,” he wrote. “The cost of this strategy, of course, is subsidies, and that cost was front and center in AT&T’s 3Q results. In total, Wireless margins were light, but Wireline cost cutting was better-than-expected, and overall earnings were therefore in line at $0.55.”

For Apple (AAPL), adding a second carrier in the States–particularly Verizon–serves a twofold purpose. First, it significantly expands the iPhone’s addressable market. Verizon (VZ) has a post-paid subscriber base upward of 83 million. And according to analysts, it will likely generate 12 million new unit sales for Apple next year. That would translate to more than $7 billion in incremental revenue and more than $3 in incremental earnings per share. Second, it blunts the competitive threat from Android. As Bernstein Research analyst Pierre Ferragu recently wrote, “[The iPhone’s] distribution vacuum, coupled with weak competitive offerings from other smartphone manufacturers, has made Android a strong alternative platform. The key to arresting Android’s momentum then will be for Apple to broaden distribution.”

Where better to broaden distribution than at one of Android’s strongest carrier proponents? And how better to set the stage for it than by putting the iPad into that carrier’s hands before the arrival of a competing Android tablet?

“The market for corporate mobile e-mail is highly penetrated and saturated outside of SMEs (Small and Medium Enterprises),” Ferragu wrote in a note to clients. “Growth in the number of companies using mobile e-mail will be limited to the SME market, in which RIM (RIMM) is likely to suffer the most from competition. If there is still some growth in the number of users at companies already using mobile email, it is limited and we suspect it will turn into negligible value growth as it will go along with significant ASP decline.”

A significant threat, and not the only one RIM is facing these days. With the iPhone and a growing procession of Android handsets making inroads into enterprise, the BlackBerry’s footing in what was once its stronghold is being eroded.

“… Despite the company’s overall dominance of the segment…74 percent of companies with mobile e-mail have already adopted alternative platforms, including the iPhone and Android,” Ferragu explains. This phenomenon is very new: Almost all these companies “opened-up” their systems in the last two years, half of them in the last 12 months. “We expect these companies to progressively ramp up the installed base of non-Blackberry solutions and therefore expect increased pressure on RIM’s performance.”

If that’s truly the case, what can RIM do to dig in and hold its position?

Not much, says Ferragu. Ultimately, people want to use their personal smartphone at work and their first choice isn’t always the BlackBerry.

“Enterprise satisfaction with RIM solutions is very high, and most managers surveyed said that they expected BlackBerry products to remain innovative and competitively featured,” he writes. “The issue boils down to cost and consumer preferences: employees want to be able to use their own phone, and allowing them to do so presents IT & Telecom managers with a way to substantially cut their operating costs.”

In other words, employees who switch to a non-BlackBerry smartphone save their employer money. And that’s a compelling proposition, as the graph below shows. Among BlackBerry-exclusive companies, BlackBerry-nonexclusive companies and companies with BlackBerry support, 50 percent said they would consider eliminating their BlackBerry solution.

“People are loving iPad as it becomes a part of their daily lives,” CEO Steve Jobs said in a statement. “We’re working hard to get this magical product into the hands of even more people around the world, including those in nine more countries next month.”

The current pace of iPad sales means Apple (AAPL) appears on track to blow the doors off most analyst estimates. Earlier this year, Bernstein analyst Toni Sacconaghi predicted sales would hit five million units in the first year, while Morgan Stanley (MS) analyst Katy Huberty was looking for more than six million. More recently, RBC Capital Markets analyst Mike Abramsky bullishly predicted sales of eight million, which at this point seem entirely realistic.

The official release below.

Apple Sells Three Million iPads in 80 Days

CUPERTINO, California–June 22, 2010–Apple® today announced that it sold its three millionth iPad™ yesterday, just 80 days after its introduction in the US. iPad is a revolutionary and magical product that allows users to connect with their apps, content and the Internet in a more intimate, intuitive and fun way than ever before.

“People are loving iPad as it becomes a part of their daily lives,” said Steve Jobs, Apple’s CEO. “We’re working hard to get this magical product into the hands of even more people around the world, including those in nine more countries next month.”

Developers have created over 11,000 exciting new apps for iPad that take advantage of its Multi-Touch™ user interface, large screen and high-quality graphics. iPad will run almost all of the more than 225,000 apps on the App Store, including apps already purchased for your iPhone® or iPod touch®.

Users can browse the web, read and send email, enjoy and share photos, watch HD videos, listen to music, play games, read ebooks and much more, all using iPad’s revolutionary Multi-Touch user interface. iPad is 0.5 inches thin and weighs just 1.5 pounds–thinner and lighter than any laptop or netbook–and delivers up to 10 hours of battery life.

[Image credit: Gizmodo commenter modestmouse]

Here’s a stunner of a data point: Apple is selling more than 200,000 iPads per week. Which means, according to RBC Capital Markets analyst Mike Abramsky, that sales of the company’s new device have outpaced those of the Mac in the United States and are closing in on those of the iPhone 3GS.

“Checks indicate that US iPad sales remain strong post-launch, driven by rising consumer visibility to iPad’s user experience, sustained PR/word-of-mouth marketing, 3G iPad launch, and broadening iPad apps/content,” Abramsky wrote in a note to clients this morning. “We believe Apple is now selling >200k iPads/week, greater than US Macs (est. 110k Macs/week) and just below US iPhone 3GS first quart (246k/week).”

Evidently, there’s quite a bit of pent-up demand for the device. Retail checks in mid-May showing widespread iPad stockouts at Apple (AAPL) stores and Best Buy (BBY). The 3G iPad is sold out at many Apple stores, and about 25 percent of them now have only Wi-Fi iPads available. Waiting lists are not uncommon.

With that in mind–not to mention the device’s forthcoming international launch–Abramsky raised his global iPad outlook for 2010 from five million to eight million.

Abramsky’s is one of the most bullish iPad sales estimates to date, though it certainly has company. Earlier this year, Bernstein analyst Toni Sacconaghi predicted sales will hit five million units in the first year, while Morgan Stanley (MS) analyst Katy Huberty said they’d likely exceed six million. (Click on table and chart below to enlarge.)

One last point: Before we go jumping to conclusions about cannibalization of Mac sales, recall Piper Jaffray analyst Gene Munster’s remarks after reviewing NPD’s April sales data for Apple:

The iPad launched in US Apple retail stores on 4/3, impacting nearly the entire month of Apple’s sales in April. As a result, April NPD data gives us the first sign of the degree to which the iPad cannibalizes iPod or Mac sales. From the early NPD data, it appears that the iPad has a minimal cannibalization impact on Mac sales, and could be slightly cannibalizing iPod sales.

[Image credit: Gizmodo commenter modestmouse and RBC Capital Markets]

Piper Jaffray analyst Gene Munster said this morning that his initial estimates of 900,000 iPads sold in the June quarter and 2.7 million in calendar year 2010 “may prove to be conservative.”

Munster figures Apple (AAPL) is poised to sell between 200,000 and 300,000 iPads this weekend–in line with the 270,000 first-gen iPhones it sold at launch. And he thinks the chances are good that the company will sell out of the device.

“When Apple began taking pre-orders customers could pre-order for home delivery on April 3 or in-store pickup on April 3,” Munster writes. “A week before the launch (on March 27) the company pushed back the shipping date to April 12 and ended the in-store reservation program for the launch. And in preparation for the launch, on March 31 Apple retail stores began calling those with iPad pickup reservations to confirm the reservation.”

What does it all mean? Says Munster: “We believe these signs indicate that initial demand for iPads was stronger than the company expected, and/or minor supply issues have slightly constrained availability for the launch. We believe the supply constraints are minor because the new ship date is not a significant delay. Ultimately, both strong demand and somewhat constrained supply appear to be resulting in the fact that Apple is selling every iPad it can build.”

Munster’s bullish estimate follows two others issued earlier this week–one from Bernstein analyst Toni Sacconaghi, who expects iPad sales to hit five million units in the first year, and another from Morgan Stanley (MS) analyst Katy Huberty, who expects the company to sell over six million units.

[Image credit: Panelfly]

Which is not to say that Sacconaghi disputes the iPad’s potential as a market-defining device. He just wonders if there aren’t a bit too many unknowns at present to make hard and fast predictions about its sales trajectory.

“What will international pricing be?” Sacconaghi asks in a research note issued this morning. “What sort of media content will be available, and how quickly? How rapidly will Apple increase distribution beyond the 10 countries announced so far, compared to the iPhone which is available in 89 countries? How prevalent will non-Apple distribution be?”

Reasonable questions. And without answers to them, Sacconaghi is playing it safe with his sales estimates. He expects Apple (AAPL) to sell between 300,000 and 400,000 iPads over launch weekend–including pre-sales. But he figures the device will sell five million in its first full year at market and 6.8 million in fiscal year 2011.

“We note that the initial iPad launch will be a US only launch and will not include 3G models; we suspect that total (including pre-sales) first weekend sales will be slightly higher than the original iPhone’s first weekend (270K), given the iPhone had a similar price, and was US exclusive (although it did not offer pre-orders),” Sacconaghi writes.

“Our analysis suggests that iPhone sales run rates have fallen significantly (i.e., by a factor of 4x – 9x) following launch weekends; we think a drop-off in sales at the high end of this range is likely appropriate for the iPad, given that pre-sales will have boosted first weekend sales. Such a drop-off in iPad sales from our launch weekend forecast would result in unit sales for year 1 of about 5 million units in-line with our estimates.”

That might not be an “over-zealous” estimate in Sacconaghi’s eyes, but it’s certainly a bullish one. Still, the analyst concludes that the iPad’s near term financial implications for Apple may not prove to be as magical as investors hope.

“We believe that while the iPad may evolve meaningfully over time, we expect its impact on Apple’s earnings to be minimal during FY 10,” he says. “In the immediate term, iPad expectations appear over-zealous, which could provide a relative short-term disappointment for investors.”

FURTHER READING:

Launch Day iPads Sold Out

iPad Available at “Most Best Buy Stores” This Saturday

Apple Grabs iPad Trademark From Fujitsu

Apple Now Accepting iPad App Submissions

Early Supplies of iPad Accessories Dwindling?

Initial iPad Demand Greater Than Initial iPhone Demand

iPad TV?

Apple’s Tablet: Read Different?

Rumored Apple Netbook Actually an E-book?

Coming Soon From Apple: Big Touch?

iTablet: Apple’s Killer App for Higher Ed

COMPLETE IPAD COVERAGE

That was an announcement few were expecting. In the weeks leading up to the event, it was widely believed that Apple’s (AAPL) tablet device, if it was going to support mobile broadband, would support it on Verizon’s network and that the announcement of that carrier deal would herald the arrival of the oft-pined-for Verizon (VZ) iPhone.

Didn’t happen. And now folks are pondering just what this might mean for Apple’s carrier relationships in the U.S. As I’ve noted before, it’s inevitable that the iPhone will cease to be an AT&T exclusive, and this will certainly be true of the tablet as well.

But perhaps not quite as soon as expected. AT&T’s iPad exclusive suggests that Apple’s relationship with the carrier is still quite strong.

You’ll recall that when Apple reported earnings earlier this week, COO Tim Cook leaped to AT&T’s defense when asked about the carrier’s network issues. AT&T’s iPad exclusive would seem to lend further credence to Cook’s remarks that Apple has been happy with the company as a carrier partner and is confident of its plans to vastly improve its network.

As Bernstein analyst Toni Sacconaghi observed in a note to clients Thursday, “We note that Apple’s tone towards AT&T has shifted since last June when Apple took some verbal swipes at [the carrier] during its WWDC presentation; COO Tim Cook was complimentary of AT&T on Apple’s recent earnings call, and appeared less committed about having multiple carriers in every country. We worry that this more amicable stance towards AT&T and the lack of a CDMA iPad could suggest that a deal with Verizon on the iPhone is still being negotiated and potentially is further away than some investors might hope.”

Perhaps. Though it may only be as far away as completion of Verizon’s long-term-evolution 4G network. Why bother building a CDMA iPad and iPhone for Verizon now? Wouldn’t it be easier to wait for the rollout of the far superior LTE network, which reportedly isn’t all that far off?

Quite a change from the profit of $1.24 billion, or 43 cents a share, the carrier reported in the quarter a year ago.

Analysts polled by Thomson Reuters (TRI) had been expecting earnings of 54 cents a share on $27.33 billion in revenue.

Revenue from Verizon’s (VZ) wireline services declined 3.9 percent to $11.5 billion. But data revenue rose 31 percent, to $16 billion. And wireless data revenue accounted for 32 percent of all service revenue, up from 26.5 percent a year earlier.

“Today’s 4Q results were eye-opening, if only because of the magnitude of the divergence,” Bernstein analyst Craig Moffet said in a research note issued after earnings. “Amidst an aggressive campaign to reinforce their positioning as the best-in-class network, and no doubt aided by AT&T’s well-publicized network travails, Verizon Wireless pulled away, with a solid 1.15M subscriber gain in post-paid and, more surprisingly, a huge opportunistic 1.0M subscriber gain in wholesale.”

But, Moffett cautioned, “…Wireline results were at least as weak as Wireless was strong, and Wireline remains the company’s center of gravity. Notable in the Wireline results were a worsening of trends in the legacy copper business and–perhaps worse–a serious miss in the growth of their FiOS business as well….Overall, we think the results must be judged as something of a disappointment.”

Reporting a wider third-quarter loss than expected this morning, Sprint (S) said it lost 545,000 wireless customers and 801,000 more in the crucial postpaid category. That’s well below what analysts had feared, but brutal nonetheless. Even more so considering that AT&T (T) and Verizon Wireless (VZ) added two million and 1.2 million total customers respectively during their latest quarters.

As I said earlier this year, Sprint is hemorrhaging subscribers like Dan Ackroyd’s exsanguinating Julia Child. And it continues to do so. The company’s churn rate, or the measure of subscribers dropping service, was 2.17 percent, up from 2.05 percent in the second quarter. Alarming, to say the least, though as the charts below (click to enlarge) indicate, the bleeding is slowing a bit.

And what of Sprint’s financial performance for the quarter? Well, put it this way: The company lost nearly half a billion dollars. For the three months ending Sept. 30, Sprint lost $478 million, or 17 cents a share. This compares with a loss of $326 million, or 11 cents a share, during the same period in 2008.

Analysts had been expecting a loss of 21 cents a share for the quarter. Revenue was $8.04 billion, down nine percent from $8.82 billion last year and below consensus estimates of $8.09 billion for the quarter.

In other words, another tough quarter for Sprint. Said Bernstein analyst Craig Moffett: “The results illustrate the enormous challenge facing Sprint. Many of the cost cuts have already been taken. Their best exclusive handset has been deployed. And still, the rock rolls downhill.”

This morning, Goldman Sachs (GS) and Bernstein both had good things to say about the company, noting that investors may have underestimated its potential for growth. “Discussions with advertising agencies, including a dinner we hosted with senior agency executives, point to rising spending on Google since June, led by travel, clothing and home improvement advertisers,” Goldman said in a research note issued this morning.

Bernstein analyst Jeffrey Lindsay was similarly bullish. “We expect Google’s results to show some signs of cyclical improvement in Q3, as easier comparisons and more favorable currencies should benefit topline trends,” he wrote in a research note. “Paid search is an early cycle advertising format given the immediacy of keyword auctions, and Google has maintained its dominant position within the category.”

Also bolstering Google (GOOG) shares today are the recent comments of company CEO Eric Schmidt, who told journalists at a roundtable discussion last week that the economy is starting to turn around. “The worst is behind us and we clearly see aspects of recovery, and what is notable is we’re seeing aspects of recovery not just in the United States but also in Europe,” Schmidt said. “We are increasing our hiring rate and our investment rate in anticipation of a recovery.”