That’s an additional $1 in EPS for 2011–from $22.25 to $23.25.

“Our expectation going into the Match 11th launch of the iPad 2 in the U.S. was that it would be successful, but probably more subdued than the launch of the original iPad a year ago,” Wolf wrote in a research note titled “AAPL: Shock and Awe.” “The launch blew out our expectations…. In our previous forecast of iPad sales, we had assumed that the fourth calendar quarter of 2010, when Apple shipped 7.3 million units, represented a seasonal high and that sales would recede in the seasonally weaker quarters that followed. Our mistake was to assume only modest secular growth in demand. The launch of the iPad 2, especially abroad, suggests that the underlying secular growth rate of sales is much higher than we previous assumed.”

So much so that it may be a struggle for Apple to satisfy demand for the iPad for quite some time. “Based on December quarter sales, it appears Apple can manufacture around 75,000 iPads per day,” Wolf observed. “Nevertheless, the long lines and stock-outs indicate the iPad 2 will probably be supply constrained for weeks, if not months.”

Which isn’t the best place to be–obviously Apple would much prefer a scenario in which it was able to satsify demand. But it’s a good one nonetheless, particularly since there’s not yet a rival tablet that comes close to matching the iPad.

An astonishing spike. And it’s even more astonishing when you break it down by sector. In the global home or consumer market, the Mac posted shipment growth of 17.1 percent, while the broader market posted a decline of .6 percent. In the business market, Mac shipments grew 65.4 percent compared to the market growth rate of 9.7 percent. And in government, they grew 549.5 percent compared to the broader market’s 8.4 percent. Of course, government sales represent only 1 percent of total Mac sales, so that spike appears more dramatic than it really is, but still…

So what’s the engine for all this growth? Needham analyst Charlie Wolf thinks it’s a halo effect from Apple’s iOS device trinity–the iPod, the iPhone and the iPad–particularly, the latter two, which are gaining lots of traction in both the home and business markets (Oddly, Apple suffered a decline in the education segment, where it has traditionally been pretty strong).

“The surge in Mac sales in the business market coincided with the introduction of the iPad in the second quarter of 2010,” says Wolf. “It would be foolish to assign a cause and effect connection between the two events. However, in less than a year, the iPad has been deployed or piloted in 80 of the Fortune 100 companies, and it’s reasonable to assume the device has invaded smaller businesses at a similar pace. It’s likely, then, that the halo effect emanating from the iPad will be far stronger than the iPhone halo effect in the business market if only because the iPad is a kissing cousin of Apple’s family of notebook computers.”

The last time Jobs went on medical leave, in January of 2009, Apple shares tanked, falling some eight percent to $78.50. But in the months that followed, they rose more than 50 percent, despite continued concerns over his health. By the end of June, Jobs was back at work. By September he was appearing onstage at Apple events.

Then came the iPad. And the iPhone 4. By October of 2010 the company’s shares had risen above $300 for the first time ever. And today they stand at $348.48.

In the end, Apple really didn’t miss a beat the last time Jobs stepped away to focus on his health, despite all the hysterical speculation that it might. And it’s not likely to this time, either — regardless of the open-ended nature of his leave and what some folks are describing as a “less optimistic” tone in his message to employees.

“Steve Jobs’s third medical leave raises the possibility, however remote, that he may not return to Apple,” Needham analyst Charlie Wolf told me this morning. “Jobs’s absence should have no measurable impact on Apple’s financial performance for several years, if ever. It took John Sculley, arguably one of the worst managers in the country’s history, three years to erase Jobs’s legacy in the 1980s. Today, starting with Tim Cook, Apple has one of the deepest and strongest managerial benches in this country. Tim Cook has matured into one of the leading managers in this country (see video below). However, no one can replace Steve Jobs, arguably the leading innovator in the past century, beginning with the Mac, then the iPod, iPhone and iPad in the past decade. What Apple loses in Jobs’s absence is the opportunity and ability to disrupt and redefine still other industries.”

Charlie’s point is a good one, though I disagree that Apple risks losing its ability to disrupt and redefine in Jobs’s absence. I think that Jobs baked those things into the company, its culture and executive leadership long ago. In fact, one could argue that it’s Apple, not the iPhone or iPad, that is Jobs’s masterpiece product, a company designed to set the bar for the industry, regardless of whether it’s him leading its day-to-day operations or not.

Below, Tim Cook speaks at Auburn University’s spring 2010 commencement.

PREVIOUSLY

• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

Consider this: In 2009, HTC, Samsung and LG accounted for 67 percent of Windows Mobile shipments. In the third quarter of 2010, those same companies accounted for 44 percent of Android handset shipments. Motorola and Sony Ericsson, also longtime Windows Mobile licensees, accounted for an additional 30 percent.

With Android commanding that kind of OEM attention, Microsoft is going to have to work harder than ever to rewrite the weak mobile story it’s written for itself over the past few years.

“To ensure Window Phone 7’s success, Microsoft must sign up virtually all of the name brand smartphone vendors who deserted Windows Mobile for Android when Microsoft failed to modernize the operating system for three years,” says Needham analyst Charlie Wolf. “Microsoft has signed up three of them and has two to go. Google would argue that it has the upper hand in this tussle because it licenses Android for free while Microsoft charges a licensing fee (albeit a small one compared to its PC licensing fees). But Microsoft simply has more at stake.”

And it knows it. Which is why it’s putting so many marketing dollars into Windows Phone 7.

Says Wolf, “We suspect the company will devote a material portion of [its marketing budget] to buy the support of the leading smartphone manufacturers.”

In a note entitled “Seeing is Believing”–their previous note was subtitled “Apple has Another Winner”–Needham revised its original forecast of four million iPad sales in the year following the device’s April launch. “We’re now forecasting iPad sales of two million units in fiscal 2010 and six million in 2011. Our forecast assumes that over half of iPad sales come at the expense of the iPod touch.” Needham analysts said they revised their call “after watching a replay of Apple’s iPad introduction and reassessing the device’s potential.” Previously Needham analysts said Apple could sell four million units in the year after the iPad’s April launch. (Needham doesn’t provide an apples-to-apples comparison of its original call for the iPad to sell four million between April 2010 and April 2011.)

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Mok writes in a research note that the downgrade reflects “early signs of weakness in the NAND flash memory sector that we believe will lead to lower prices.” He contends checks find that NAND product inventories have increased substantially, and that demand in both the retail and OEM channel has slowed since May. Heading into the second half, he writes, “we are concerned that production ramps”–Mok expects higher output from both Samsung and Toshiba–“will swing the NAND sector into oversupply.”

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It has not yet been given a price or a release date, but Palm’s forthcoming Pre handset continues to have a remarkably restorative effect on the company’s share price. It wasn’t so long ago that Palm shares were trading just above a dollar. Today, they’re hovering around $8.67, bouyed up by little more than the device’s Consumer Electronics Show debut, an uneventful media Webcast, some hyperbolic remarks from one of the company’s investors and the enthusiasm of a few bullish analysts. Among them, Deutsche Bank’s Chris Whitmore and Jonathan Goldberg, who boosted their price target on Palm (PALM) to $12 from $10 today claiming that Palm will not only ship the device on schedule, but will follow it up with other form factors. “Since their earnings release last week, we have conducted a round of checks on Palm and remain confident in the potential for their new Pre smartphone to turnaround the company’s results,” the two wrote in a note. “The Pre timetable seems on track at least, and both carrier and developer interest remains high….We also confirmed earlier checks and vague hints on their recent call that the company is working on other form factors which we could see in the market sooner than expected.”

Quite a vote of confidence. Though to be fair, it’s not shared by everyone. Certainly, Needham analyst Charlie Wolf is looking askance at claims that the Pre will turn out to be Palm’s iPhone. “The stock appears fully valued even if the Pre turns into a stunning success,” he wrote in a recent research note. “To have management tell it, WebOS is the best thing since sliced bread and the Pre is a thing of beauty. Obviously, with the platform launch still weeks away, it’s impossible to challenge them.”

Bolton says he now expects Q1 revenues for most of the companies he covers to be down 15-20 percent sequentially, with Q2 sequentially flat. (His previous theory was that Q1 would be down about 10 percent.) He says that currently depressed orders have been depressed by supply chain-wide inventory reductions, but that “visibility into a snapback in orders remains uncertain.” His current theory: Slash estimates to the bone, and hope the companies can start to beat them in the second half.

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Shares of the deteriorating Internet company slipped on news of the impending announcement, falling more than two percent to $11.96. Earlier in the day, they’d been trading at $12.79.

Clearly, Bartz’s appointment doesn’t appear to be inspiring much confidence in investors–at least at the outset. Perhaps all her enterprise experience is proving a bit of a turnoff. Ten years as vice president at Sun Microsystems (JAVA). Board seats at Intel (INTC), Cisco Systems (CSCO), and NetApp (NTAP). Where’s the Internet experience? Where’s Steve Jobs? Surely he could right this sinking ship.

“She was an inoffensive, but largely unexciting candidate–someone who would be a steady hand at the wheel–but investors were hoping for a lot more than that,” Jeff Lindsay, an analyst at Sanford C. Bernstein in New York, told Bloomberg. “She’s undoubtedly a competent and able executive. The problem is, is she the right fit for the job?”

Likely a better fit than Jerry Yang. And that’s a start, right? Oh, there’s this as well: When Bartz started at Autodesk it had revenues of $285 million. Today it generates about $1.5 billion.

Says Needham analyst Mark May:

If the reports are accurate, our initial reaction is that we view Bartz as a good choice because:

Of course, there is more we’d like to see/hear before making our final determination, such as i) what’s Bartz’s strategy/vision; ii) will current President Sue Decker resign; iii) will Bartz hire a strong #2 w/ new media experience; and, iv) will Chairman Roy Bostock resign. That said, our initial reaction to the possibility of Bartz being named Yahoo!’s new CEO is favorable.

$500 fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine…. Right now we’re selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they’ll have the most expensive phone by far ever in the marketplace and let’s see…what’s the expression? Let’s see how the competition goes.”

–Microsoft CEO Steve Ballmer on the iPhone, January 2007

“Apple’s iPhone 3G, introduced in July, is the only reason smartphone growth did not slow in September.” This according to Needham analyst Charles Wolf, who in a research note today points out that the nearly seven million iPhones Apple (AAPL) shipped during the three-month period ending September account for all of the sequential shipment growth in the quarter. Astonishing. The iPhone now represents about 16.6 percent of the entire smartphone market worldwide, second only to Nokia (NOK).

One phone. One, maybe two, carriers per market. Nearly 17 percent of the entire smartphone market worldwide in under two years. What was that you said again, Steve?

$500 fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine…. Right now we’re selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they’ll have the most expensive phone by far ever in the marketplace and let’s see…what’s the expression? Let’s see how the competition goes.”

–Microsoft CEO Steve Ballmer on the iPhone, January 2007

“Apple’s iPhone 3G, introduced in July, is the only reason smartphone growth did not slow in September.” This according to Needham analyst Charles Wolf, who in a research note today points out that the nearly seven million iPhones Apple (AAPL) shipped during the three-month period ending September account for all of the sequential shipment growth in the quarter. Astonishing. The iPhone now represents about 16.6 percent of the entire smartphone market worldwide, second only to Nokia (NOK).

One phone. One, maybe two, carriers per market. Nearly 17 percent of the entire smartphone market worldwide in under two years. What was that you said again, Steve?

May notes that the company has a large cash position–about $4.64 a share–which generates about 50 percent of its pre-tax income. A recent drop in bond yields, he cautions, will result in a hit to the company’s earnings. He also expect slower PC Postage subscriber growth given the weakening macro environment.

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“Sales of Apple’s iPhone 3G appear poised to blow through everyone’s forecasts,” Wolf wrote in a research note this morning. “While RIM’s dominance of the enterprise market appears secure, at least for now, the company’s great growth driver–the consumer market–is bound to come under siege because of the iPhone.”

Wolf notes that the BlackBerry Pearl has allowed the company to “dramatically” increase its consumer sales, but he asserts that the company’s success has stemmed from a lack of competitive offerings.

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