iPhone, iPad Growth Show No Signs of Stopping

Competition from Google hasn't stopped Apple's iPhone and iPad from selling at impressive rates, according to the earnings report the company released Tuesday. Just as important, Apple executives painted a picture of a thriving app marketplace where developers are making a significant amount of money. In the quarter ending June 25, Apple said it sold 20.34 million iPhones (up 142 percent from a year ago) and 9.25 million iPads (up 183 percent). Those sales helped Apple reach $28.57 billion in revenue and $7.31 billion in profit—chief executive Steve Jobs called it "our best quarter ever" in the report. During the earnings conference call, chief operating officer Tim Cook attributed much of the sales growth to emerging markets, particularly China and Latin American countries like Brazil and Mexico. When asked whether he's worried about competition from Android, Cook responded that he feels "fantastic" about growth and customer satisfaction, reeling off talking points like the fact that Apple sold 33 million devices in the last quarter with its iOS operating system, and that it has sold more 220 million iOS devices overall. Meanwhile, he said tablets trying to compete with the iPad aren't getting "any traction to speak of." On the app side, Cook noted that there are more than 100,000 iPad-specific apps, compared to what he said are only hundreds built for competing devices. He also repeated numbers that Apple shared last month—that there are more than 425,000 apps available, which have been downloaded 15 billion times, and which have earned $2.5 billion for their developers. One product that Cook wasn't crowing about was the Apple TV, which Jobs had famously called a "hobby". Although Apple released a smaller, cheaper version of the device last year, and although it reported 1 million Apple TV sales shortly afterwards, Cook didn't reveal any new numbers Tuesday. Instead, he emphasized that Apple "really got it right" with the redesign, but the company still considers Apple TV a hobby that isn't a core part of its business. "We're continuing to invest in it because we think that there's something there," he said. Forrester analyst James McQuivey has said that Apple TV's big challenge will be bringing in enough TV shows. During Tuesday's conference call, analysts also brought up the movie and TV selection in iTunes. Chief financial officer Peter Oppenheimer argued that Apple has already built out a substantial library in the United States, and he said the company is working to make more content available internationally. "We have some neat stuff coming," he added. Despite the impressive quarter, Apple didn't sound too optimistic about its next three months, estimating that revenue would fall to $25 billion. This may simply be caution, but Oppenheimer also said the estimate was based on a "different product mix", and Cook said there will be a "future product transition" that he couldn't announce yet. The likely explanation: Apple will announce a new iPhone in the new quarter, and sales will slow as customers wait for the new device.

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iPhone, iPad Growth Show No Signs of Stopping

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