Apple profits despite tablet slump

Apple may rightly claim to have developed the tablet device category, however the gamble isn’t paying off for the firm with iPad shipments falling 36% in calendar 1Q11 – the firm’s fiscal 2Q.
 
Combined shipments of the iPad and iPad 2 fell from 7.33 million in calendar 4Q10 to 4.69 million units in the recent quarter.
 
Tim Cook, Apple’s COO, said sales suffered due to unprecedented demand for the iPad 2 in the firm’s domestic market and because some buyers held off until the second version of the tablet went on sale. In an earnings call, he noted the effect of last month’s earthquake and tsunami in Japan had little impact on the supply chain during the quarter and said supplies were secure for the second calendar quarter.
 
While the company sources hundreds of components from Japan, contingency plans put in place have filled in as short-term alternatives, he said. But Cook warns of potential supply chain threats in the future as the situation in Japan changes.
 
The supply chain will be essential to maintaining momentum Apple achieved in the first calendar quarter, with a 112% rise in iPhone shipments to 18.6 million units beating the previous quarterly sales record by 15% and powering the firm to a profit of $5.99 billion (€4 billion) – up 95% on calendar 1Q10.
 
Apple predicts revenue will fall slightly from $24.6 billion in calendar 1Q to $23 billion for the current quarter, with earnings per share set to fall from $6.40 to $5.03.

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