According to NPD data cited by Piper Jaffray analyst Gene Munster, Mac sales rose 31 percent year over year for the month of January. Why? Simple. Said Munster, “We believe the reason for the significant improvement in the sales data is primarily due to Apple catching up with iMac supply.”

When Apple last reported earnings, CEO Tim Cook noted that iMac supplies hadn’t been what the company had hoped. “We left the quarter with significant constraints on the iMac,” Cook said. “And we believe … that our sales would have been materially higher if those constraints weren’t there.”

Cook went on to pledge that Apple would work hard to ramp up iMac production, though he cautioned that supply-demand equilibrium may be something of a moving target in the short term. “On iMac, we are confident that we are going to significantly increase the supply,” he said. “But the demand here is very strong, and we are not certain that we will achieve a supply-demand balance during the quarter.”

On its face, the NPD seems to bear this out. The increase in Mac sales is likely the result of Apple improving production, but as the two-to-three-week/three-to-four-week shipping times on the Apple Store suggest, the company is still having trouble manufacturing enough iMacs to meet demand.

Piper Jaffray analyst Gene Munster, an Apple bull if there ever was one, whacked 2.2 million units from his September iPhone forecast Thursday for precisely this reason. Munster’s team surveyed 100 U.S. Apple Stores over the past week and concluded that the supply of iPhone 5 is “extremely limited.” Given that, Munster lowered his iPhone forecast for September from 27.2 million units to 25 million units.

But Munster’s not yet willing to take a scalpel to the holiday quarter. By December, he figures, Apple should be able to meet demand for the iPhone 5, and when it does, investors will finally see those outrageously big sales for which they’ve been hoping. “While the supply issues for the iPhone 5 since launch are concerning in terms of the company’s ability to fully meet demand in December, we are staying with our 49 million unit estimate for the holiday quarter,” he said.

So, assuming supply and demand for the iPhone 5 hit equilibrium in the next month or so, Apple is going to be in a great position heading into the holidays. As Jefferies analyst Peter Misek observes, right now there simply aren’t enough iPhone 5s to go around. “Remember, there are 170 million post paid subscribers coming off contract,” Misek told AllThingsD. “That’s overwhelming all supply ramps. The demand here is unprecedented.”

Among analysts that follow Apple, there are a few theories emerging on the company’s … imaginary iPhone sales shortfall.

• This particular iPhone upgrade cycle might be larger than expected. Some analysts are reporting that a significant percentage of iPhone 5 buyers are consumers upgrading from the iPhone 4S. According to some recent Apple Store exit surveys — one from Topeka Capital Markets, for example — as many as 35 percent of respondents buying the iPhone 5 were upgrading from the iPhone 4S. In other words, people who aren’t yet eligible to buy the iPhone 5 at a subsidized price are spending hundreds of dollars more to upgrade to it, anyway. And while that obviously doesn’t explain why Apple sold five million iPhone 5s instead of the six million to eight million some exuberant analysts had forecast, it might help explain why preorders sold out so quickly.
• A number of analysts believe that sales might have been significantly higher were it not for component supply constraints. Specifically, they say that supplies of the new in-cell displays that allow Apple to make the iPhone 5 so much thinner than its predecessor aren’t yet high enough to meet the level of demand Apple is seeing. “We believe the key issue in today’s shipment data is in-cell supply constraints,” Barclays analyst Ben Reitzes said in a note to clients. “[Monday's] announcement fits with our view that Apple would only be able to ship limited quantities in the September quarter; we expect a solid production ramp and improved availability in C4Q12. … Estimates for iPhone 5 display supply are for only about 10 million screens for C3Q12, with a significant ramp to start C4Q12.”
• Initial iPhone 5 supplies may simply have been constrained by the length of the one-month-plus manufacturing window Apple has typically allocated for iPhone launches. In other words, it has maxed out capacity, and can’t raise it without adding still more production lines.
• My own theory: The aggressive worldwide rollout Apple has mapped out for the iPhone 5 is perhaps too aggressive, and forced the company to cap sales in the first-wave market in order to retain supply enough for the 22 additional markets getting the device this week. So Apple looked at its inventory, decided five million iPhone 5s was enough for a first-weekend sales boast, and reserved the remainder for the second-wave launches scheduled for this Friday.
• Finally, it could be that analyst expectations were simply too high, and not at all grounded in reality.

But in the end, all of these theories are moot. Because, ultimately, we don’t know how many iPhone 5s were ordered over opening weekend. All we know is that Apple delivered at least five million of them to customers. For all we know, there could have been twice that number in pending orders by the end of the weekend that Apple can’t deliver for another few weeks.

Walt Mossberg and I could not be more thrilled to announce that Tim Cook, CEO of Apple, will be the opening-night speaker at our 10th D: All Things Digital conference.

It will be Cook’s first appearance at D, as well as his first time being onstage at an event not run by Apple or for investors since he was named CEO last August.

Since then, Cook has increased the enormous progress made under the late Apple CEO and co-founder Steve Jobs, with the iconic Silicon Valley giant putting out a number of new and innovative products and also becoming one of the most valuable companies on earth.

(Of course, Jobs had made a half-dozen always memorable visits to our stage over the last decade, the last of which was in 2010 at D8.)

So we are looking forward to hearing Cook’s perspective on where the industry and Apple is going, and perhaps to get a glimpse into what makes its new leader — who is also a longtime Apple vet — tick.

And Cook knows a lot, to be sure.

Before he was named CEO, Cook played a critical role as COO at Apple, responsible for worldwide sales and operations from its supply chain to sales activities to service and support globally. Cook also ran Apple’s Macintosh unit.

Before Apple, he worked at Compaq, Intelligent Electronics, and even spent a dozen years at IBM.

Cook joins a D10 speaker list that is full of major players in tech and media, including: New York City Mayor Mike Bloomberg, Oracle CEO Larry Ellison and Federal Trade Commission Chairman Jon Leibowitz, as well as many more.

(And we still have more speakers to come.)

This is, of course, bad news if you’re in the business of making the commodity Dynamic Random Access Memory chips that go into PCs, servers and smartphones. A state of oversupply coupled with weak demand means the chips command lower prices than they otherwise would. The situation can be good, however, if you’re buying computers, because memory upgrades get cheaper.

The problem, as related by the research firm IHS iSuppli, is a rise in inventories of chips that its analyst Mike Howard describes as “alarming.”

ISuppli measures how much unsold inventory the chipmakers themselves have in their warehouses — which include Micron Technology in the U.S., Elpida in Japan, and the South Korean pair of Samsung and Hynix. The higher the number is, the more intense the downward price pressure becomes.

The stockpile of DRAM chips as of the end of the third quarter of 2011 stood at 12.8 weeks, which is nearly a third higher than it had been three months earlier and double what it was in early 2010. It’s also a lot higher than the typical average of 9.2 weeks.

There are a lot of factors creating the glut. Tablets like the iPad and Kindle Fire are eating into notebook sales, and don’t require nearly as much DRAM as notebooks do. And new operating systems don’t require the incremental boost in onboard memory as had been typical.

Nor is the economic uncertainty caused by the sovereign debt crisis in Europe helping. Flooding in Thailand has also disrupted the supply of hard drives which has in turn affected the overall demand for PCs and servers. Computer makers who can’t get hard drives simply won’t build as many computers, and thus won’t be buying the DRAM they otherwise would be.

Something similar happened in 2008 when the global recession sapped computer demand and caused a pileup of DRAM chips that lasted nine quarters. This cycle could turn out to be worse, iSuppli says.

Overall, iSuppli reckons the market for DRAM chips was worth about $6 billion in the fourth quarter of 2011, down by 11 percent from the prior quarter, and it’s only heading further south. The worst, Howard says, is apparently yet to come.

If the economy turns upward, or even is perceived to be on the mend, the glut can work its way down pretty quickly. In 2009 the stockpile dropped by more than half over three quarters.

And if it seems obvious that these chip companies should just stop making DRAM and let demand catch up with supply, it’s actually not that easy. Chip factories, or fabs, contain billions of dollars worth of manufacturing equipment running processes that are difficult to stop and start. Also, it’s more expensive to have them sitting there doing nothing but depreciating than turning out a product that brings in revenue, even if it’s running at break-even or a slight loss.

According to Taiwanese trade mag DigiTimes, Apple has locked up nearly 60 percent of the world’s touch-panel capacity, leaving behind a very tight supply for its rivals to scrap over.

“Touch panels are currently suffering the most serious shortage due to Apple holding control over the capacity of major touch panel makers such as Wintek and TPK, and with US-based RIM, Motorola and Hewlett-Packard also competing for related components,” says DigiTimes. “Second-tier players are already out of the game.”

So Apple ends up with a double advantage–not only has it secured supply enough for its own needs, but it has also caused scarcity in the market and disadvantaged its rivals. It’s impossible to say definitively, but my guess is this is the result of that mysterious $3.9 billion component supply investment COO Tim Cook mentioned during Apple’s first-quarter earnings call.

“We’ve historically entered into certain agreements with different people to secure supply and other benefits. And the largest one in the recent past has been we signed a deal with several flash suppliers back at the end of 2005 that totaled over $1 billion because we anticipated that flash would become increasingly important across our entire product line and increasingly important to the industry. And so we wanted to secure supply for the company, and we think that, that was an absolutely fantastic use of Apple’s cash. And we constantly look for more of these. And so in the past several quarters we’ve identified another area and come to some recent agreements that [CFO Peter Oppenheimer] talked about in his opening comments, in that these payments consist of prepayments and capital for process equipment and tooling. And similar to the flash agreements, they’re focused in that area we feel is very strategic.”

Indeed. Funny how Apple now controls–largely—both the demand and supply sides of the touch panel business.

A Verizon Wireless spokeswoman confirmed the move, saying “We always put customers first.”

Wall Street analysts have been left bewildered in recent days, as federal prosecutors begin to home in on insider-trading cases that appear to involve routinely published information about public-company supply chains.

Case in point: Apple Inc., one of the hottest stocks of the past year, for which an entire industry of well-known and obscure analysts and “expert networks” scramble to report every detail of the company’s undisclosed production plans.

The proliferation of such research raises questions about where prosecutors will draw the lines that define insider trading.

Read the rest of this post on the original site »

Great fun to listen to for Apple watchers. But not that meaningful, really–mostly positioning and spin. There was at least one important nugget, though: Apple has a specific shopping list, with some very big-ticket items on it.

Jobs wouldn’t lay those out, of course. But when asked if he planned on spending any of Apple’s $51 billion (!) in cash via a dividend or stock buyback, he explained that he had something else in mind. From my notes, a combination of direct quotes and paraphrase:

“We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash,” and we want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

M&A guys, start your engines!

The “what will Apple do with all its cash” speculation story is a time-honored tradition–I seem to remember writing one four or five years ago, when Apple had $6 billion or so lying around, and discussing whether it made sense for Jobs to buy a music company like Universal.

But I don’t remember Jobs every signaling his desire to go shopping quite as openly as this before (feel free to correct me in comments if I have this one wrong). Two caveats:

• Jobs is famous for saying one thing and doing…something else. So don’t get too riled up about this.
• Just because Jobs is talking about spending money on “opportunities” doesn’t mean he’s talking about buying a company. He could be talking about big, hairy capital expenditures, like the billion-dollar server farm Apple is finishing up in North Carolina.

Still. It’s hard not to read or hear that quote and not think that he’s thinking about some very big buys. Like what?

A lot of folks will assume that Jobs is talking about buying a big content producer. Music doesn’t make any sense, because there’s little value left in that business. But if Jobs wants to make headway in the TV business, perhaps it makes sense for him to snag a big broadcaster or programmer to give him the leverage he needs with the Comcasts, Viacoms and Time Warners of the world.

Or you could make the same argument for other content makers, like game studios. The biggest one, Electronic Arts, has a market cap of a mere $5.21 billion. Jobs could give ERTS shareholders a hefty premium and still have plenty of walking-around money.

Or perhaps it makes zero sense for Apple to be in the content business, because it’s done just fine not being in the content business to date.

So then what?

Feel free to throw your own guesses in, but I’ll kick off with my own: It’s a company that has yet to compete with or brush up against Apple in any significant way. And it’s one that Apple seems unlikely to be able to move aside, even if it wanted to. And it’s one that’s already competing directly with Google, which has to make Jobs like it even more.

And, if you believe this L.A. Times report, Jobs is already strolling around Palo Alto with its CEO: What do you think of Apple buying Facebook? Discuss….

Earlier

Apple investors who got their first look at the company’s earnings numbers don’t like them–AAPL is trading down seven percent after hours. Let’s see if Apple executives can soothe their concerns during the earnings call.

You can listen in for yourself via this link, or follow along in my liveblog below:

Live Blog

Apple or Apple’s IR company trying some very, very mellow string and piano stuff while we wait.

CFO Peter Oppenheimer kicks off. “Outstanding results” for September quarter. Highest quarterly revenue, earnings.

Mac products and services: 3.9 mm Macs. Record quarter. 27% y/y growth. Double market growth for Q.

IMac, Macbook, Macbook Pro all good. Asia/Pacific performing best.

IPods: 9.1 million.

ITunes revenue more than $1 billion.

IPhone. “Extremely pleased” with 14.4 million unit sales; basically doubled y/y.

$8.6 billion in sales value of iPhones alone.

Heaping praise on iPhone 4 (justified) and stressing iPhone’s move into corporate market, rattling off blue-chip customers.

IPad. “Thrilled” with momentum. “Great enthusiasm” from customers.

65% of Fortune 100 deploying or piloting iPad. Lists some of them.

125 million iOS device sales last month.

200,000 registered iOS developers.

“Very happy” with results of iAd so far.

On to Apple stores. More records here.

Expects to open 40-50 stores next year, 50% of them outside U.S.

IPhone sales mix “better than expected”–boosted overall margin.

$51 billion cash hoard. [Deep, longing sigh from everyone in media, tech business.]

For the year: 5x revenue and 10x earnings compared with five years ago.

“Very enthusiastic” about lineup, “extremely confident” in new product pipeline.

Rare appearance from Steve Jobs!

Had to drop by for first $20 billion quarter.

“We’ve now passed RIM, and I don’t see them catching up to us in the foreseeable future.”

They have to move into software/platform development, and I don’t think they can.

So what about Google?

Apple is activating 275,000 iOS devices per day on average over the past 30 days; peaked at 300k iOS devices some days. 300,000 apps in app store.

Unfortunately, there is no solid data on how many Android handsets sold each quarter.

Google loves to characterize Android as open, Apple as closed. “We find this a bit disingenuous.”

Windows is “open.” But Android is “very fragmented.” OEMs like Motorola install own stuff to make their phones stand out. We don’t do that.

Shout out to “Twitterdeck” ( I think he means Tweetdeck) and their challenges running 100 versions of Android client. “Compare this to iPhone, where there are two versions of the software…to test against.”

Meanwhile, at least four app stores on Android. “This is going to be a mess for both users and developers.”

Apple’s app store has 3x apps compared with Google marketplace.

“Even if Google were right, and the real issue was closed vs. open, it’s important to remember that open systems don’t always win.”

For instance: Microsoft’s [miserable] “PlaysForSure” strategy, RIP.

Google’s “open” argument is a “smokescreen.” Real issue is what’s best for customer–”fragmented vs. integrated.”

Integrated is a huge advantage for us, because it’s better for customers, and better for developers. “We are very committed to the integrated approach no matter how many times Google tries to characterize it as closed.”

Now! On to our tablet competitors:

First of all, only a few credible competitors.

Second, most of them are pushing 7.5″ screen. That means they are just at 45% size of our 10″ screen. “You heard that right….This size isn’t sufficient to create great tablet apps.”

Extolling features of iPad size vs. teeny tiny tablet competitors: They’re “tweeners”–too small to compete with iPad, too big to compete with smartphones.

IPad has 35,000 apps. New crop of tablets will have “near zero.”

Competitors having a hard time coming close to iPad pricing, even with their puny screens. We make our own everything, and this results in an “incredible product, at a great price.” Our competitors will “likely offer less, for more.” They’ll be “DOA. Dead on arrival.”

Questions and Answers

Supply constraints on iPad?

COO Tim Cook: We’ve got a handle on it. And note that we’re expanding distribution in the U.S. and internationally, with more countries to come.

Question about margins I didn’t quite catch.

Oppenheimer: Sold more iPhones than planned, and commodity prices came down, so that helped.

Q for Steve. Please talk about “iPad opportunity.” Size of business, etc., two years or more down the road?

Jobs: “The iPad is clearly going to affect notebook computers. The iPad proves it’s not a question of if, it’s a question of when.” Already seeing “tremendous” interest from education and “much to my surprise, from business.”

“The more time that passes, the more I am convinced that we’ve got a tiger by the tail here.” We’ve trained tens of millions of people on this OS via the iPhone. “I see it as really general purpose, and I see it as very big.”

Could it be the second biggest business after the iPhone?

“I try not to predict, I try to report.” We’re selling more iPads than Macs.

What about Flash? Any update?

“Flash memory? We love flash memory” [hohoho]

A question on iPhone demand, which I missed.

Q: Steve, “You are the tablet market.” Do you see tablet competitors cutting into your market in the same way you cut into RIM’s market? Won’t that fragment the market?

“I have a hard time imagining what those strategies…are.” Pricing won’t work. “Flash hasn’t presented any problem at all; as you know, most video on the Web is now presented in HTML5.” The iTunes store is dominant and “we’re not done” working on stuff for the future.

Q: Smartphones–”Do you see that as a zero-sum game?”

Jobs: As you know, most phones in the world aren’t smartphones. They’ll convert over time, so there will be room for multiple competitors, but “eventually it will turn into a zero-sum game, or close to that.”

Q: For Oppenheimer: Another margins question.

A: We do see a small sequential decline. Higher-than-expected mix of new iPods and new iPads. We’ve been very aggressive on pricing there, and that’s what’s pushing down margins.

Q: Steve, how’s your Apple TV “hobby” coming? And what’s up with streaming media?

Jobs: We don’t talk about unannounced products, but I’m happy to tell you what we know about Apple TV. We have moved to streaming. It’s all streaming. Everything is rented, and/or soon to be streamed from iPad or iPhone.

So far we’ve sold 250,000 new Apple TVs. “I’m thrilled with that.” And with Airplay set up, “it will give people another big reason to buy it.”

Another margin/guidance question. Seems to be the same one repeated each time, with the same answer.

Q for Steve: Key risks for company?

The goal is to make the best devices in the world. “It’s not to be the biggest. As you know, Nokia’s the biggest… but we don’t aspire to be like them.”

Android is the biggest competitor. Outshipped us in June quarter as we transitioned. We’re waiting to find out what happened in this quarter. “I don’t know how we’ll find out” though.

Our approach is to create products that “just work” and “their approach is very different from that.”

Questions for Steve and Tim: Aspirations for iPhone and iPad. In Mac, you didn’t aspire to high market share; in iPod, it was the opposite–you own that market. In the past, Tim you’ve described iPhone business as closer to the iPod model. Steve, you sort of said something different. Please resolve that difference: Biggest, or best?

Jobs: “Nokia makes $50 handsets. We don’t know how to make a great handset for $50.” We want to make “breakthrough, best products,” and “drive costs down” while making them better through “relentless improvement.”

We have a very low share in the phone market. Single digits. And a very high share in tablets. But we don’t think about it that way.

The reason we won’t make a seven-inch tablet isn’t because of price point, “it’s because we don’t think you can make a great tablet with a seven-inch screen.” And as a software company, we think of software first. Developers don’t want to build for all these different platforms and devices, and on this small screen. “It’s not about cost, it’s about value, when you factor in the software.”

Q: Okay, but if the market moves toward lower-functionality smartphones and “dramatically lower price points,” then you’ll cede share, right?

Jobs: “You’re looking at it wrong.” You’re looking at it as a hardware guy who doesn’t really know about software. You assume that software “can come alive on this product that you’re dreaming of. But it won’t” because developers want to build for better products, with faster processors and better screens.

Q: You have about $50 billion in cash. What are you going to do with that? Why not return it to shareholders?

Jobs: “We strongly believe that one or more very strategic opportunities may come along that we’re in unique opportunity to take advantage of because of our cash” and want to keep our powder dry “because we feel that there are one or more” opportunities in the future.

Missing next question about iPhone and iPad penetration into corporate market.

[Market not sold on Apple's story yet, btw: Stock still down 5.84%.]

Question for Oppenheimer. Guess what? It’s about gross margins. Any change in manufacturing, etc? Any color at all?

Oppenheimer: Don’t provide product-specific gross margins. Always trying to lower costs, though. “We were happy” with gross margins for quarter. Down slightly because of product mix, as I’ve said over and over.

Q: Talk about demand from carriers to pick up iPhone 4.

Cook: The pressure I’m feeling is about supply. That’s the problem. At the country level, we have 166 relationships in 89 countries. In many countries, we went to more than one carrier. Latest one of those is Germany.

IPhone 4 in 85 of 89 countries. Will be in all 89 by end of year.

What happens to margins and subsidy when you go nonexclusive?

We don’t give information out on specific markets, but you can see that our ASPs have stayed above $600.

For Steve: Why do you have advantage in price on iPad, as opposed to PC?

Jobs: We engineer so much of it ourselves. Everything from chip to battery to enclosures. We’ve learned so much. We’ve learned a lot, developed a lot of our own components, where competitors have to go through middlemen. “This is a product we’ve been training for for the last decade.”

Call is over. You can hear the whole thing on a podcast later this evening.

Unexpectedly strong consumer appetite for gadgets like Apple’s (AAPL) iPad and new smartphones from HTC Corp. has stretched the capabilities of some companies that make the memory chips, touch displays and other parts found in those devices. Auto sales, too, have snapped back, straining supplies of custom chips used in cars.

Companies like Apple and Nissan are seeing the drawbacks of lean manufacturing methods, which call for carrying little inventory but make supply snags tougher to offset.

They are also victims of an overstretched global supply chain trying to meet recovering demand after the recession forced suppliers to slash production capacity and postpone plans to upgrade their facilities.

Read the rest of this post on the original site

“This is the most successful product launch in Apple’s history,” CEO Steve Jobs said in a statement. “Even so, we apologize to those customers who were turned away because we did not have enough supply.”

Sales of 1.7 million units in three days: That’s nearly double the number sold during the launch of the 3Gs and damn close to some of the more bullish first-weekend sales estimates. Makes you wonder how many units the company might have sold had supply not been constrained and had the still missing-in-action white iPhone 4 been available for purchase at launch.

An impressive showing, particularly considering that it took Apple 72 days to sell one million of the first iPhone in 2007.

Below, the official announcement:

iPhone 4 Sales Top 1.7 Million

Apple® today announced that it has sold over 1.7 million of its iPhone® 4 through Saturday, June 26, just three days after its launch on June 24. The new iPhone 4 features FaceTime®, which makes video calling as easy as one tap, and Apple’s new Retina display, the highest resolution display ever built into a phone, resulting in stunning text, images and video.

“This is the most successful product launch in Apple’s history,” said Steve Jobs, Apple’s CEO. “Even so, we apologize to those customers who were turned away because we did not have enough supply.”

According to Whitmore’s survey of 100 iPhone 4 retail outlets (Apple, AT&T, Best Buy, O2, Orange and Car-Phone stores in the U.S. and U.K.), 60 percent of Apple Stores were sold out by Thursday evening, as were 100 percent of retail-partner stores. Supplies were replenished overnight, but by end-of-day Friday, quite a few stores were reporting stock-outs. And that number only grew on Saturday.

“Our checks carried out on Saturday revealed that Apple retail stores which were stocked-out on Thursday/Friday were unable to replenish stocks with ~95 percent of stores contacted experiencing stock-out situations. Further, most Apple representatives were not certain about the iPhone 4 stock replenishments and comments such as ‘We’re out of stock’, ‘Don’t know when we will have them in store’, ‘We sold out just minutes ago’, ‘No, we don’t know when we will be getting the phone’ and ‘Your best bet is the online store’ were cited frequently,” Whitmore reported.

“In addition,” according to the analyst, “retail stores which had iPhones in-stock cited long lines (2 to 3 hours) outside the stores. Comments such as ‘We have very limited numbers, we should be sold out in a couple of hours’ and ‘Please give us a call just before you leave home to make sure the iPhones are in stock’ suggested waning inventory levels.”

Whitmore figures Apple (AAPL) sold more than one million iPhone 4s over the weekend, but notes that shipments could have been dramatically higher if there was more supply.

“While the strong start is encouraging, we believe the long-term opportunity for growth of the iPhone is even more significant as near-term shipments are being gated by supply constraints,” Whitmore wrote. “We estimate Apple to sell 44 million iPhones in CY10 (8.5 million in the June quarter) and 55 million in CY11.” (See chart below; click to enlarge.)

“Given the size of the iPhone 4 pre-order and our analysis of the expected upgrade cycle, particularly the remaining 3G users, we believe the full launch weekend of June 24-27 is shaping up to potentially be a 2 million-3 million iPhone event,” Fidacaro said in a research note today.

“[That’s] about 2-3x higher than the one million units sold over the first three days for both the 3GS and 3G launches,” the analyst added. “The strong initial demand seen during the pre-order is a positive for the June quarter and has apparently been limited by supply with new orders now indicating a July 14 delivery date.”

With 600,000 pre-orders racked up as of Wednesday and a few days yet to take more, a two-million unit launch weekend for Apple (AAPL) doesn’t seem much of a stretch. Frankly, neither does three million, given the iPhone 4′s feature set and price, as well as the fact that this year’s launch weekend begins on a Thursday rather than a Friday.

FURTHER READING

• Walt Mossberg’s iPhone 4 Review
• Analysts Raise iPhone 4 Sales Forecasts From Huge to Ginormous
• New iPhone 4 Pre-Orders Now Delayed to July 14
• Apple: Sorry We Sold 600,000 iPhone 4s Yesterday
• iPhone 4 Pre-Orders Sold Out at Apple, Suspended at AT&T
• What Happened to the White iPhone 4?
• AT&T Now Dropping iPhone Calls and iPhone 4 Pre-Orders
• And if You Have Any Questions About Your New iPhone 4, Just Ask Our Radio Shack Geniuses
• Everything You Need to Know About the iPhone 4

Release:

Although we have delivered more than 500,000 iPads during its first week, demand is far higher than we predicted and will likely continue to exceed our supply over the next several weeks as more people see and touch an iPad(TM). We have also taken a large number of pre-orders for iPad 3G models for delivery by the end of April.

Faced with this surprisingly strong US demand, we have made the difficult decision to postpone the international launch of iPad by one month, until the end of May. We will announce international pricing and begin taking online pre-orders on Monday, May 10. We know that many international customers waiting to buy an iPad will be disappointed by this news, but we hope they will be pleased to learn the reason–the iPad is a runaway success in the US thus far.

In a research note this morning, Canaccord Adams analyst Peter Misek says he has heard rumblings that production issues at Apple’s (AAPL) manufacturing partners may keep the company’s iPad in short supply when it first goes on sale.

“We have…heard that the upcoming iPad launch may be somewhat limited as a manufacturing bottleneck has impacted production of Apple’s newest device,” Misek writes.

“An unspecified production problem at the iPad’s manufacturer, Hon Hai Precision,” the analyst explains, “will likely limit the launch region to the US and the number of units available to roughly 300K in the month of March, far lower than the company’s initial estimate of 1,000K units.”

Looking ahead, he adds, “The delay in production ramp will likely impact Apple’s April unit estimate of 800K as well. It is also possible that, given the limited number of units available in March, the launch will be delayed for a month.”

If Misek is right–and that’s a big if; Misek’s prediction earlier this year that Apple would debut a brand new iPhone on Verizon (VZ) at its January special event proved woefully off–it’s a slight setback for Apple, which obviously wants to take good advantage of enthusiasm for the device to really blow out first-year sales. That said, since this would be only a temporary production delay, it probably wouldn’t have that much effect on sales.

Says Misek: “We believe that the only material impact from the iPad delay could come in the form of frustrated consumers and some modest loss of lustre for the company’s product launch.” He figures Apple will sell 550,000 units in its third quarter, which ends in June, 1.2 million in fiscal year 2010 and 3.5 million in 2011.

The resulting demand for NAND flash will be “insatiable,” says iSuppli analyst Michael Yang. And supplies for the year will likely be strained. iSuppli figures that in 2010, iPhone shipments will reach 33 million units, up from 25.1 million in 2009–each with an average of 35.2 gigabytes of NAND.

That’s a hell of a lot of flash. Add to that the memory requirements of Apple’s iPod line and its new iPad slate and, well, you can see where things are going (see chart below; click to enlarge). Says Yang: “With the iPhone already the largest application for NAND, this huge growth is likely to lead to some periods of under-supply for the year.”

That’s not likely to be a problem for Apple (AAPL), which typically inks long-term supply agreements with its flash suppliers to ensure that its needs are met. Recall that the company boasted of a half-billion dollar flash memory deal with Toshiba last July.

“We did a long-term supply agreement with Toshiba,” Apple COO Tim Cook explained at the time. “As a part of that, as part of the terms and conditions, we paid them $500 million as a pre-pay earlier in the quarter. You know, we view Flash as a very key component for us because as you know we use it in so much on so many of our products and also we are a reasonable percentage of the user of Flash on a worldwide basis.”

But an undersupply of flash will almost certainly cause difficulties for other consumer electronics companies, which may be forced to grapple with part shortages and price increases across the entire NAND flash market.

Let’s see if the paper’s executives can turn that around during their earnings call. We’ll also be looking for any updates the Times can provide on its pay wall plans, and, of course, its role in the launch of the Apple iPad.

UPDATE: As I noted below, though the New York Times (NYT) was a featured partner at the launch of Apple’s (AAPL) iPad, even sending a small team to Cupertino to create an app a few weeks before the event, there was zero discussion about iPads today.

CEO Janet Robinson made a generalized comment about the growth of the Times’s mobile distribution, but that was it. And not a single analyst showed any interest in this stuff–a good reminder that neither the Times nor Wall Street expects the iPad to be material to the company’s business for quite some time.

Liveblog

On the call: CEO Janet Robinson, CFO Jim Follo, Times Media Group boss Scott Heekin-Canedy, and Digital boss Martin Nisenholtz

In a preamble, CEO Robinson highlights cost-cutting, balance sheet repair, and asset sales (radio station, but not the Boston Globe; the company is still looking at selling its stake in the Boston Red Sox–the process is “complicated” and is “taking longer than anticipated”).

Robinson recaps the pay wall plan, metered approach, etc. Nothing new here so far.

The paper is waiting until 2011 to deploy the pay wall, she explains, because it wants to make “subscribing as smooth and easy as possible….It will take some time to build, deploy and test the best systems.”

Robinson offers a few revenue details, primarily a recap of the earnings release.

Ads by category: National ads down 12 percent, retail down 23 percent, classifieds down 27 percent.

News media online grew four percent, primarily from display advertising (the rest of online growth comes from About.com).

Print ad category decreases came from Hollywood, among others. Ad category increases: Print auto, health care, packaged goods.

Circulation revenue is up because of newsstand, price increases. The Times is benefiting from declines at other papers, because as local papers cut back, it is offering more info than ever. Robinson notes expansion by the paper into local news in the Chicago and San Francisco markets, adding that there are plans on going local in “several” other key markets

Time to brag about new mobile products and applications. The paper counted 75 million page views from mobile and apps in December, and the iPhone app has been downloaded three million times since launch.

Back to digital: Display ads are up, classifieds down; they improved “significantly” as Q4 progressed.

About.com is still the Times’s digital cash machine: Revenue is up 22 percent, and operating profit grew from $10 million to $18 million.

Overall, Internet businesses are up 10 percent and accounted for 15 percent of revenue for the quarter. Online advertising revenue accounted for 23 percent of ad revenue of the quarter.

“Limited” visibility for 2010, which is what’s upsetting The Street, supposedly. But the paper is still “realigning” its cost base.

CFO Jim Follo’s comments may not interest all readers except for this part: The Times is continuing to reduce headcount, he notes, which dropped by 18 percent in 2009. The company is also looking at the benefit structure for both employees and retirees. It froze that awesome supplemental retirement plan that pays certain retirees a very lucrative pension.

We’ve been benefiting from a drop in newsprint prices last couple years, Follo notes, though suppliers are trying to raise prices again, but there’s a supply glut, so we think they’ll have a tough time doing that.

No big capital spending projects are planned. [Presumably, the pay wall is not that expensive to build.]

[Aside: Interesting that NYT.com GM Denise Warren, who's normally on these calls, isn't on today's.]

Questions and Answers

Question: More color on advertising, please.

Scott Heekin-Canedy: We have some optimism, but advertisers are “guarded,” and ads are still bought–or retracted–at the last minute, as they were last year.

Tech, media, health care, and auto ad categories all look promising. The mix is “definitely different” from last year “when it seemed like every single category was down.” Now, many categories are showing “flat to significant growth.”

Question: Are you still optimistic that you can reach a deal on the Red Sox?

Robinson: “Yes we are.” Lots of due diligence, lots of different properties (stake in team, stadium, network, etc.).

Q: What are incremental costs of setting up a pay wall?

Robinson: “We feel this is an elegant solution,” but we want to wait the year and make sure we’re well prepared, etc. Again, integrating home delivery and digital is crucial.

Nisenholtz: Regarding cost, there will be a “modest operating cost” to deploy the tech. We’re hiring a “handful” of people to do that and deploying “modest” capital, but it’s not material.

[Apology: I missed a question on ad categories, though it seems to reprise the earlier question.]

Q: Can you give us a sense of additional cost-savings you can extract this year?

Follo: Nope.

Q: Will your headcount go down again in 2010?

Follo: Yes.

[Missed another question here.]

Next a question about the tax rate, which I can’t imagine anyone reading this cares about.

Q: Can you tell us more about January ad trends, i.e., how much is national vs. local?

Robinson: We won’t break that out (anymore).

Q: Was it materially better than Q4?

Robinson: She repeats her earlier comments from the release. “Very good performance” on the digital side of business. December was particularly good, but we’re not going to be more specific about January.

Heekin-Canedy: That said, we don’t think January is much of an indicator about the rest of the year, anyway. Different beast, not much connection between December [when people were dumping leftover dollars].

[There's a giant disconnect between analysts and the chattering classes here. If the latter ran the call, this would be about nothing but iPad, iPad, iPad. But we're 48 minutes in, and zilch so far. Which is a good reminder: No matter what launches with the tablet this year, this stuff isn't going to have a big impact on Big Media for quite some time.]

Q: Where is growth coming from at About.com?

Robinson: Both consumer packaged goods and display ads. We’ve upgraded the sales channel to go after display and that’s helped a lot.

Nisenholtz: Strong categories include CPC, travel, education and financial services. There’s also retail strength.

Q: Are CPGs new to About.com?

Nisenholtz: Yeah. Well, not exactly. It’s a big site, lots of reach. But we’ve updgraded the sales team and the increase there is part of the payoff. We reach a lot of moms. The Web site skews female.

Q: You may end up paying $60 million to $80 million back into the pension plan. When could that come? Q4?

Follo: Could be sooner than that. We’re in a good position regarding liquidity.

[The final question is about joint ventures that you don't care about.]

And that’s it for the call.

No wonder it was a blowout quarter.

After market close Monday, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. That topped the estimates of analysts surveyed by Thomson Reuters, who’d expected the company to earn $1.42 a share on revenue of $9.2 billion.

The company sold 3.05 million Macs during the quarter, a 17 percent increase over last year. It sold 10.2 million iPods, an eight percent decline from the year-ago quarter.

And iPhones? Apple (AAPL) sold 7.4 million of those–seven percent more than during the same period last year. So much for those supply-chain issues that some analysts warned might undermine iPhone sales.

“We are thrilled to have sold more Macs and iPhones than in any previous quarter,” said CEO Jobs. “We’ve got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.” [Editor's Note: "...really great new products"--is that code for a tablet?]

Apple shares, which closed at $189.86 today, are spiking as I write this. At $203.90, they’re up more than seven percent in extended trading.

Looking ahead to its fiscal first quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion. That’s comically lower than the $1.91 a share on $11.45 billion in sales that analysts are forecasting. But as today’s results clearly demonstrate, Apple subscribes to the underpromise-and-over-deliver school of guidance theory, so there’s likely little cause for concern.

So, to recap: Apple sold more Macs and more iPhones than in any previous quarter in the company’s history. Before the holiday quarter. And in midst of the worst economy we’ve seen in 50 years.

Notes From the Earnings Call:

• Apple COO Tim Cook and CFO Peter Oppenheimer are handling the earnings call. CEO Steve Jobs will not be attending.
• Oppenheimer says this was Apple’s second-highest quarterly revenue ever. Highest-ever operating margin. “We are thrilled with these record-breaking results, particularly given the economic environment around us.” Obviously.
• Macs are showing “fantastic momentum,” says Oppenheimer. Sales have outpaced the market in 19 of the past 20 quarters. Quarterly sales were up 17 percent; portable sales, 35 percent. Interesting: 42 percent growth in Asia.
• Moving on to iPods: Sales were down to 10.2 million from 11 million a year ago. But iPod touch sales doubled. MP3 market share in the U.S. is now more than 70 percent (according to NPD, I think).
• iPhone sales were up seven percent. Apple will begin selling iPhones in China later this month. More than 85,000 apps in App Store. Two billion downloads.
• Apple opened 15 new stores during the quarter. Now has 273. Will soon open first two stores in France, including one at the Louvre.
• Moving on to the Q&A. Asked about those iPhone 3GS supply issues I mentioned earlier, Cook acknowledges that demand did outstrip supply in a number of countries. But the situation improved “markedly” in September. How are things looking for China? Cook: “I would have liked to have had more, honestly, because we were still short in some countries at the end of the quarter.”
• Apple is obviously very excited about the iPhone’s impending debut in China. “There’s a good opportunity, and we’re really excited to get started,” says Cook. “It’s the largest market in the world in terms of total phones.”
• No comment on the broader economy. “We just spend our time projecting our business and leave the economy to the economists.”
• Does Apple worry about iPhone rivals? Android? Not really, says Cook. “We feel very good about suiting up and competing against anyone.” Our competitors are still trying to catch up with the first iPhone, he adds.
• Snow Leopard? Cook says the company’s been “pleasantly surprised” by sales of Apple’s latest OS.
• How does Apple benefit from carrier-exclusivity iPhone deals? Cook says carriers with exclusivity deals are willing to invest more in the platform and that means greater innovation. Visual voicemail is an example of that. That said, he adds, “We’ve found no lack of people wanting to sell iPhones, frankly.”
• International store revenue up more than 20 percent, on average.
• More on iPhone supply issues. Cook insists this is not a component issue, though he notes that silicon can sometimes be hard to get. “We feel good about our position now.”
• And still more on iPhone supply issues: How many iPhones would Apple have sold if it had an adequate supply? Impossible to say, really, Cook says, adding that 3GS units were in short supply virtually everywhere in September.
• Enterprise demand for the iPhone is very strong. It’s either being deployed or already in use at some 50 percent of Fortune 100 companies. Same with Europe and the FT 100. Widely used in higher ed and government as well.
• But perhaps not widely enough. Asked about institutional sales, Cook says Apple isn’t seeing much stimulus funding. The company’s worried about state spending. Says Cook, “We may see more this quarter, but it’s too early to tell.”

As the analyst notes, NPD data for the first two months of the September quarter show Mac sales up about seven percent year over year. iPhone sales are even more robust.

“Our checks indicate that worldwide demand for the iPhone 3GS is outstripping supply,” Munster writes. “This strong level of demand, we believe, will support unit sell-through of about 7.5m units in the Sept. quarter.”

Continuing, Munster notes that “PJC Wireless Analyst Mike Walkley’s checks for the first two months of the Sept. quarter indicated constraints at retail for the iPhone 3GS. We have also seen signs of constraints in international markets. Media reports indicate that the CEO of wireless carrier 3 Italia indicated that the company is selling 20k iPhones per month, but could sell more than double that amount if it had adequate supply.”

If this is problem, Munster asserts, it’s a fleeting one: “While supply constraint is a issue near-term, we see it as a long term positive, as worldwide demand appears to be very strong for the iPhone 3GS.”

In quarters past, Apple has guided revenue four percent below Street expectations on average and earnings-per-share 12 percent below Street expectations. But the company’s actual results have typically beaten those estimates by an average of three percent on revenue and by 24 percent on earnings per share. Munster expects this to be the case again when Apple reports earnings on Monday.

Over at RBC Capital Markets, analyst Mike Abramsky sees Apple’s forthcoming earnings report playing out in much the same way for largely the same reasons. “Checks show that the iPhone 3GS is the most popular Smartphone at AT&T and other global carriers (e.g., O2 UK, Rogers),” he wrote in a note to investors today.

“Despite launch in June,” Abramsky added, “some models of the iPhone 3GS were stocked out at Apple retail stores and carrier stores through Q4; however, checks show retail availability appears to have improved early September. While sell-through of the prior-gen iPhone 3G has been slow at AT&T since the launch of the iPhone 3GS, we believe the $99 iPhone 3G is gaining traction outside North America given lower upfront cost (important where prepaid is high).”