Apple iPad sales fail to hit forecasts
By Khaama Press - Tue Oct 19 2010, 1:27 pm
San Francisco (FT) — Sales of Apple’s iPad have failed to meet the steadily rising expectations for the touchscreen tablet device, letting some of the air out of the enthusiasm that has built on Wall Street in recent weeks.
Apple’s shares slipped more than 6 per cent in after-hours trading after it said it had sold 4.2 million of the devices in the three months to the end of September, below the 5 million that some had projected. It sold 3.3 million after being introduced part of the way through the prior quarter.
Meanwhile, Steve Jobs stepped up the rhetoric in his battle with Google, whose Android software has emerged as the main rival for both the iPad and iPhone. The Apple chief executive predicted that consumers would be disappointed by smaller tablets running Android which are expected to be launched in the next six months.
He also said the proliferation of online stores for Android applications would force developers to work much harder to distribute their apps than they do with Apple‘s single, supervised store for iPhone and iPad programs.
Moreover, he said, Android’s use on more than 100 handset models meant that programmers would have to focus on a limited range of display styles and functionality, so that not all of their software would run equally well on all versions.
Jobs said that Google’s portrayal of its software system as “open” and Apple’s as “closed” was a “smokescreen”, and that the real difference was that Apple’s combination of hardware, software and third-party commerce was integrated and more effective.
He went on to take aim at plans for Android-based competitors to Apple’s iPad, saying that a seven-inch display was too small to provide high-quality applications for a tablet. He said Apple had decided not to make an iPad in that size for that reason.
Jobs’ comments came as Apple reported earnings of $4.31 billion, or $4.64 a share, for its fourth quarter, up from $2.53 billion or $2.77 a year earlier, and well ahead of Wall Street’s consensus estimates of about $4.03. Revenue soared 67 percent to $20.3 billion from $12.2 billion. The company’s shares slipped back after rising 10 percent in the past week ahead of the earnings report and a Wednesday update to the Mac computer line.
The biggest contributor to the profit surge was Apple’s stronger than expected sale of 14.1 million iPhones, 91 percent more than in the year-ago quarter.
Jobs said that the volume had made the iPhone more popular than Research in Motion’s BlackBerry, based on that company’s most recent quarter, and that the iPhone 4 might have regained the shipment lead Apple ceded to smartphones running Android software earlier in the year.