Apple dismisses rumors about order cuts as iPad and iPhone shipments soar

CEO Tim Cook says Mac and iPad Mini sales would have been better had it not been for supply-chain constraints

Apple today announced quarterly record revenue of $54.5 billion and a net profit of $13.1 billion, fueled significantly by brisk sales of iOS devices. During the earnings call, Apple CEO Tim Cook took a moment to indirectly address rumors that the company had drastically cut orders on screens for the iPad Mini, a point that had generated handwringing that the company was bracing for a significant drop in shipments.

Cook did acknowledge that certain supply-chain constraints prevented Apple from meeting the full demand for the iPad Mini, but he predicted Apple would "achieve supply-demand balance this quarter."

"I know there's been lots of rumors about order cuts. Let me take moment to comment, but not on any rumor," Cook said. "I would suggest it's good to question accuracy of any rumor about build plans. Even if any data point were accurate, it is impossible to extrapolate [from that] for our business. Yields can vary, we have different suppliers, a long list that makes any single data point not a great proxy for what's going on." (InfoWorld's Galen Gruman attributes the order cuts to Apple switching to a new, better LCD technology called IGZO.)

Indeed, judging by the earnings call, Apple has seen brisk sales of iPads and iPhones this past quarter, selling a record 22.9 million tablets -- a year-over-year increase of 7.5 million. The company also sold 47.8 million iPhones for the quarter, up from 37 million from the year-ago quarter. That's a healthy gain, particularly considering the number of Android competitors that have emerged since the start of 2011, and the surging sales of smartphones from chief rival Samsung.

Although Android has been expected to dominate the Asian mobile market, Apple revealed it's done a credible job penetrating greater China, which includes Taiwan and Hong Kong. Revenues from greater China for the quarter were $6.8 billion, up from $5.4 billion in the previous quarter (a 26 percent jump) and up from $4.1 billion a year ago (an increase of 67 percent).

Complementing the increased sales in iOS devices, Apple also reported a record $2.1 billion in sales in the iTunes Store.

Although iOS products sold well this past quarter, the news wasn't as rosy on the Mac side: Apple sold 4.1 million computers this past quarter, a year-over-year decrease of 5.2 million. Cook chalked up the decrease in sales to three factors: First, he noted that the overall PC market has been weak, experiencing an overall drop of 6 percent, per IDC. Second, he noted that the company sold 23 million iPads last quarter, which he said cannibalized Mac sales. (He also noted that iPad sales would have been higher had Apple managed to build enough iPad Minis to meet demand.) Third, he pointed to the late arrival of the new iMac, which cut into overall sales.

Cook said that he was, in general, unconcerned about iPad sales cannibalizing Mac sales, citing the so-called halo effect: "If someone buys an iPad Mini and it's their first Apple product, we know they'll buy other Apple products."

iPod sales weren't as brisk year over year either, down from 15.4 million in the year-ago quarter to 12.7 million this past quarter. They've been in decline for several years.

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