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iPhone sales boom but iPad disappoints Wall Street

Gregg Keizer | Oct. 29, 2012
Apple on Thursday announced record revenue on the back of booming iPhone sales, but for the second quarter in a row iPad sales came up short of Wall Street's expectations.

"We've learned over the years not to worry about cannibalization of our own products," said Cook. "It's much better for us to do that than somebody else to do it. And the far, far bigger opportunity here are the 80 million to 90 million PCs that are being sold per quarter. I think a great number of those people would be much better off buying an iPad or a Mac, and so that's a much bigger opportunity for Apple."

Like the iPhone, the Mac line also exceeded analyst predictions, posting sales of 4.9 million units -- under 1 million desktops, almost 4 million notebooks -- for a minuscule combined growth rate of under 1%. It was the third quarter running that Mac sales growth was in the single digits.

Revenue for the Mac line was up 6% year-over-year.

"The good news was that notebooks' ASP had a big jump, and was the highest it's been since the first quarter of 2009," said Gottheil. The $1,356 ASP for Apple laptops in the quarter was up 9% over the previous period.

"That was all from the higher-priced Retina 15-in. MacBook Pro," Gottheil said, referring to the high-resolution laptop Apple started selling in June that starts at $2,199.

This week, Apple introduced a 13-in. MacBook Pro with a Retina-style screen that begins at $1,699, $500 more than the corresponding model minus the high-resolution display.

The Mac's growth year-over-year, while tiny -- just 0.6% -- was better than the computer industry average by a mile. Global personal computer sales in the third quarter were down between 8% and 9%, according to Gartner and IDC, which released their estimates two weeks ago.

But there's trouble ahead for the Mac, namely the iMac, which Apple refreshed this week. The problem: It won't have any to sell until next month, and the largest model won't be available until December.

"We'll be constrained for the full quarter in a significant way," Cook said of iMac supplies during the crucial fourth quarter. "There will be a short amount of time during the quarter to manufacture and ramp those, and I expect the demand to be robust."

Gottheil suspected that screen availability was the reason why the new iMacs won't ship for weeks. "Certainly something challenged them about the new iMacs," he said.

But he backed Apple's decision to unveil the new desktop computers this week rather than wait until enough were in the channel. "This was a gigantic roll-out this week ... they usually roll out one category at a time, but they had more to say about the iMacs than what would fit in a press release."


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