iPhone and iPad Sales Continue to Drive Apple’s Growth
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Apple’s managed to put together another great quarter with blockbuster sales and profits. The biggest growth area for the company continues to be the iPhone and iPad which now make up nearly 68% of the company’s total revenue. Apple stunned analysts posting whopping sales of 20.34 million iPhones and 9.25 million iPads for this June quarter. This represents a unit growth over the year-ago quarter of 142% and 183% for the iPhone and iPad respectively.
To put these sales into perspective, Apple sold approximately 2.6 iPhones and 1.2 iPads every second of every day for the past three months. This is an incredible pace and a significant jump from last quarter where Apple sold 18.65 iPhones and 4.69 million iPads.
Apple CFO Peter Oppenheimer was particularly happy with iPad demand saying they “sold every iPad they could make” with only 1.05 million iPads currently in channel inventory which was “well below” Apple’s target of 4-6 weeks worth of inventory. Apple COO Tim Cook said iPad 2 sales have been a “frenzy” and Apple has continued to increase capacity to meet the overwhelming customer demand.
The iPad and iPhone are doing especially well in the enterprise space with over 90% of the Fortune 500 either testing or deploying an iOS device. Oppenheimer said iPad enterprise adoption was particularly strong in the 15 months since the iPad launched and saw adoption in a number of enterprise segments including retail (Nordstrom and Estée Lauder), transportation (Alaska Airlines and American Airlines) and healthcare (HCA Healthcare and Cedars Sinai).
Cook said that “iPad 2 demand is fantastic” and the recent supply problems that caused iPad 2 shortages, which created significant customer frustration, were not because of any particular production issues but because of overwhelming demand. Thanks to improved production, Cook said supply has further improved for the first three weeks of July and allowed some iPad models to finally become “supply / demand balanced.” Cook’s statements match our own informal findings indicating iPad 2 inventory improving at most Apple retailers here and Apple’s own US online store which now shows a 1 – 3 day shipping time versus the 4 – 6 weeks which was the norm for several months after the iPad 2 was released.
While iPhone and iPad sales have become a major part of Apple’s business, one product continues to be a science experiment. Cook reiterated Steve Jobs’ position that Apple’s TV business remain a “hobby” business nearly four years after its launch. While Apple TV growth was “healthy” it simply didn’t stack up to the other power hitters in Apple’s iOS lineup.
Although Apple certainly had a stellar quarter some analysts sill had to question the company’s ability to continue growing at this rate and maintaining market share. It won’t be easy to continuously knock it out of the park, but based on previous results, we’re sure Apple still has many great quarters ahead.
