Where have all the iPads gone...long time building. A news wrap on $AAPL quarterly earnings

Steve Jobs is dead. The great Apple visionary who led his company from --

What? Not dead. Oh, dying?

OMG DYING! STEVE JOBS IS DYING!

Analysts are like journalists. Yes, they're a little bit smarter but their work ethic is just as bad, just as sloppy, just as shite. I mean, ever ask yourself, given that they repeatedly regurgitate existing information and 'peer' into the future by extrapolating their regurgitated information, unbroken, unbound, for all eternity...just what the hell do they do with all their work time? Isn't it shocking how little they produce? How little insight they offer? Hell, forget insight about companies, markets, technlogies. I'm not sure they even understand themselves. 

Fact is, most analysts talk about a 'Steve Jobs effect'. Given how much cash Apple keeps throwing off, despite how they are one of the leaders in multiple growing global markets, analysts tell us that the reason Apple's stock remains so low compared to the market is because, well, Steve Jobs is going to die.

And when he dies, there will be no visionary, no great leader. Apple will falter. Which gets priced into the stock.

I think the analysts have this ass backwards. The Steve Jobs effect is not that Jobs is dying, but that he lives. And the analysts perceive him as a wizard, an alchemist, a man of magical powers. And because he is magical, Apple does not deserve, in their mind, to be priced higher. Because what Apple are doing, a giant company that keeps growing, is not rational; it must be magical. It is Steve. The wizard. And we refuse to believe the numbers. The curtain will be pulled, the truth will be exposed. Apple will be revealed. And it will be as it was in the days of the Microsoft Terror. Where Apple is marginalized; a niche player.

Analysts are stupid.

Which reminds me, Apple reported earnings today. Meaning that analysts, bloggers and journalists are jumping around, yelping like dogs at the kennel 10 minutes before feeding time. Before we recap what they are saying, let's go to the source:

The Company posted record second quarter revenue of $24.67 billion and record second quarter net profit of $5.99 billion, or $6.40 per diluted share. These results compare to revenue of $13.50 billion and net quarterly profit of $3.07 billion, or $3.33 per diluted share, in the year-ago quarter. Gross margin was 41.4 percent compared to 41.7 percent in the year-ago quarter. International sales accounted for 59 percent of the quarter’s revenue.

Apple sold 3.76 million Macs during the quarter, a 28 percent unit increase over the year-ago quarter. The Company sold 18.65 million iPhones in the quarter, representing 113 percent unit growth over the year-ago quarter. Apple sold 9.02 million iPods during the quarter, representing a 17 percent unit decline from the year-ago quarter. The Company also sold 4.69 million iPads during the quarter.

Margins down a touch. iPod sales way down, to be expected. I'm amazed, each time, when I see that Mac is growing *significantly* while the PC market overall is *contracting*. That, I'm sure, puts a smile on Steve Jobs' face. iPhone sales pretty damn impressive. Remember, only one vendor, Apple, makes these. Similarly, 6.8 million iPads for the quarter is awfully -- wait. What? Only 4.69 million iPads sold! Does sold mean sold? 4.69 million. Cause that seems rather anemic. Cue the journalists!

Franz, er, Peter Kafka of All Things D gives lays bare the facts, hoping we're smart enough to take note of these suspicious iPad numbers: 

Apple sold 4.7 million iPads in the first 3 months of this year — enough to generate $2.8 billion in revenue. But that number is more than a million units short of what Wall Street’s consensus of 6.2 million).

What happened?

Apple chief financial officer Peter Oppenheimer won’t spell it out in his remarks, but is basically arguing that Apple couldn’t make enough. He said the company is “thrilled with the momentum for iPad,” and is seeing “very robust demand for iPad.”

“Customer enthusiasm has been tremendous for ipad 2, and we’re working as hard as we can to get into their hands as fast as possible,” he added. “We sold every iPad 2 that we could make.”

Really, Apple? Thrilled with the momentum. Robust demand. Customer enthusiasm!

Those are deathwatch terms.

Only because Apple has repeatedly, for years, low-balled analysts (Wall Street) and only because Apple has for the past several years *proven* they can sell hardware in any market am I giving them the benefit of the doubt. They couldn't make enough, couldn't meet demand, possibly no one wanted an iPad 1 this past quarter knowing a new one would be out soon (March). Still, if Apple does not *double* that 4.7 million sold number in next quarter, expect a noticeable pull back on $AAPL.

Ridding ourselves of the iPad elephant in the room, let's move on to others that cover Apple:

John P-, also of All Things D offers up...a regurgitation of the numbers. Fine. Here you go:

Posting second-quarter results after the bell Wednesday, the company reported earnings per share of $6.40 on revenues of $24.67 billion–an 83 percent increase over the same period a year ago. Blah blah blah.

It was the biggest non-holiday quarterly revenue and earnings in Apple history.

Fear not. It gets better. Wall Street Journal knows what Apple Inc is. A smartphone platform company. They get to the gist of the earnings call: 

Apple's quarter was stoked in particular by sales of the iPhone. The company began selling its iPhone 4 through Verizon Wireless in February—its second carrier in the U.S. after an exclusive arrangement with AT&TInc. ended.

The company said Wednesday that it sold 18.6 million iPhones over the quarter, more than double that of a year ago. That figure was also 15% higher than the December quarter, which is typically Apple's strongest period since it is fueled by holiday sales. Wall Street estimates had called for sales of 16.5 million iPhones over the quarter. 

And, of course, they must also talk about STEVE JOBS HAS PANCREATIC CANCER! But, give them credit. They look at the numbers critically, and focus on the pressing issues facing the company, including supply chain, iPad sales and that [it's all very sophisticated] lawsuit with Samsung: 

Mr. Jobs, 56 years old, who was diagnosed with a rare type of pancreatic cancer in the past, continues to be involved on major strategic decisions in the company, said Mr. Cook in the conference call.

"He is still on medical leave but we do see him on a regular basis," said Mr. Cook, adding that "I know he wants to be back full time as soon as he can."

Mr. Cook also stood by its partnership with Samsung Electronics Co. calling it "a very valued component supplier" even though it sued the Korean electronics company last week for trademark and patent infringement related to its iPad and iPhone. "I expect the strong relationship will continue," he said, adding Apple took legal action separate from that relationship because it felt Samsung's mobile communication division "crossed the line."

Crossed the line. I like that. I don't know what Apple might earn from a court of law, but at minimum, it shows that the biggest maker of Android smartphones, just like all the haters, has quite the hard on for Apple. Apple will market the shit out of that.

Fortune's Apple blogger, Philip Elmer-Dewitt, does us all a favor by putting the numbers in handy bullet form. Bullets:

The numbers and details from the earnings call.

• Sales: $24.67 billion, up 82.8% year over year
• Profits: $5.99 billion, up 95%
• EPS: $6.4, up 92%
• iPhone: 18.65 million units, up 113% (!)
• U.S. iPhone sales were up 155%, thanks in part to Verizon; Greater China up 250%
• iPad: 4.69 million units, compared with 7.33 million in Q1.
• iPad sell-through was 5.1 million units, given the decline in inventory
• Mac: 3.76 million units, up 28%. Asia-Pacific Mac sales up 76%.
• iPod: 9.02 million units, down 17%. More than 50% iPod touch
• iTunes store: Sales of $1.4 billion
• Gross margin: 41.4%, compared with guidance of 38.5%
• Apple stores: 71.1 million visitors, up 50%
• Store sales: $3.19 billion, up 90%
• Cash and marketable securities: $65.8 billion, up from 59.7 in Q1
• Revenue guidance for Q3: $23 billion
• EPS guidance for Q3: $5.03
• Gross margin guidance for Q3: 38%

He continues:

[Apple COO] Cook was particularly enthusiastic about the growth in Apple's computer sales, especially in the face of the 3% decline in the broader PC market reported last week by IDC. This is the 20th quarter in a row that the Mac has outperformed its competitors. "We seem to be the only guys building innovative products in that space," Cook said.

He also took a swipe at the Android phones, comparing Apple's "integrated" approach unfavorably to Google's "fragmented" approach. Users appreciate that Apple takes full responsibility for the iPhone experience, according to Cook. The fragmented approach, he said, turns customers into systems integrators. "And I know very few customers who want to be a systems integrator."

Good stuff. If Google wants to beat the "open" dead horse. Apple might as well keep hurling the "fragmented" FUD. Solid coverage in a short period by Fortune. 

Unlike...Dan Frommer of Business Insider tries something new for a paid writer. Two whole posts. In one day!

iPad sales were much lower than expected -- just 4.69 million shipped, versus expectations around 7 million. This is probably because of iPad 2 supply problems and low demand for old iPads leading up to the iPad 2 launch.

Yeah, it probably is, Dan. Cause that's what they already fucking told us.

Second piece:

Android could potentially destroy the iPhone the way Windows did to the Mac.

So RBC analyst Mike Abramsky asked Apple COO Tim Cook about that on today's earnings call.

Why isn't Android a Windows repeat? Why won't it crush your growth, especially in the U.S.?

Why isn't Android going to continue to grow and improve itself and become more and more dominant? Why is Apple not at risk of severe disruption here? Why won't the industry standardize around Android and make iOS the secondary platform

I can't argue with Frommer's cold, pure Spockian logic. Microsoft was once dominant and Apple was on the sidelines. That can only mean in the smartphone wars Apple will be on the sidelines. A community college couldn't give our Dan a better education.

Oh, and Dan. Apple is selling -- selling -- over 300,000 iOS devices a day. It's kind of a big number.

Meanwhile, the New York Times can't say enough good things about Apple:

A surge in demand for its products yielded gains in income and revenue that were impressive even by Apple’s lofty standards. If there is a problem, it is that Apple is having trouble keeping up with some of the consumer demand.

Apple’s deal to make iPhones available on the Verizon Wireless network helped to lift iPhone sales, which more than doubled, to a record 18.65 million. The phones had previously been exclusive in the United States to AT&T’s network, which many criticized for dropped calls.

“We did actually very well everywhere,” Tim Cook, Apple’s chief operating officer, said in a conference call with analysts.

Apple did not give specific numbers for iPhone sales for Verizon. But overall sales for both AT&T and Verizon increased more than one and a half times in the United States compared with the quarter a year earlier.

The arrival of the iPad2, just before the quarter ended March 26, helped stoke tablet sales. Apple sold 4.69 million tablets in the quarter, including the iPad2 as well as the original version.

Consumers bought so many, in fact, that Apple is having trouble keeping up with the demand, prompting analysts to ask when Apple could ramp up production, and by how much.

Mr. Cook acknowledged the problem, calling it “the mother of all backlogs,” but he declined to be more specific about this quarter’s production. Apple’s Web site says there is a one- to two-week delay in shipping online orders. 

To underscore his confidence, Mr. Cook reminded analysts that he approved Apple’s introduction of the iPad2 in 25 additional countries in late March and that the device will go on sale in 13 more countries next week.  

Even Apple’s MacBook laptop computers, an afterthought amid all the buzz around Apple’s phones and tablets, showed big gains after the introduction of updated versions during the quarter. Apple sold 2.75 million laptops, a 53 percent increase.

Sales of Mac desktop computers, however, fell 12 percent, to one million.

The iPod, Apple’s music player, was among the few disappointments. Sales declined again, yet another indication of how smartphones, generally incorporating music players, are replacing single-function products. Sales of the iPod fell 17 percent, to 9.02 million.

Shit, I forgot that Apple made desktops. And let's not kid ourselves. If Apple can't sell iPods by the truckload anymore, there was no way no how that Cisco was ever going to get decent numbers for that Flip camera.

Still, I loved that the Times got on their knees for Apple and still found the wherewithal to stick it to AT&T.

TechCrunch, for all that crap they ship out as "reporting" that's little more than re-stating some VC's press release, actually does the best job of all. Let's close with them. Offering that precious gift we like to call insight.

But if you dive into the numbers, you will see that three areas drove the overall growth more than any others: iPhones, MacBooks and China.

The iPhone now makes uphalf of Apple’s revenues, or $12.3 billion in the quarter. Sales grew 126 percent in dollar terms, with unit sales up 113 percent. In the U.S. alone, iPhone sales were up 155 percent. Bringing Verizon on board helped goose the numbers, but AT&T wasn’t exactly complaining either.

As fast as U.S. sales of iphones keep growing, it is not the fastest growing region. In “Greater China,” iPhone sales were up 250 percent. Sales of all products across Asia Pacific were up 151 percent to $4.7 billion. In contrast, Europe is a $6 billion region for Apple, and the Americas is $9.3 billion. “Greater China” (which presumably includes Hong Kong, Taiwan and other Asian markets, could soon become Apple’s second largest region.

One of the very first things Apple said in their earnings statment was "international growth". They were explicit about this. The company has repeatedly talked about "aggressive" expansion into China and the rest of Asia. Only TechCrunch appears to understand how important this is to Apple.

Sad, actually. Maybe that's why so many get their stock (or development) advice from Fred Wilson. They don't know no better.

Apple is growing *and* growing globally. In new markets and in new products. In stuff it did not make a year ago, or just over 3 years ago. Its stiffest competition, Android, is a serial copier of everything Apple builds and releases. Google continues to make all its money off of Internet advertising. Microsoft continues to make all its money off Windows - Office products made in the prior century. Stop being lazy. Stop rehashing old stories. Don't think different. Just think.