Thursday, October 25, 2012

Apple iPad Sales Disappoint

Apple Inc delivered a second straight quarter of disappointing results and iPad sales fell short of Wall Street's targets, marring its record of consistently blowing past the investors' expectations.

The numbers lacked the positive surprises that investors had grown used to and came after Apple undershot revenue targets in the previous quarter. Its shares bounced back, however, after CEO Tim Cook told analysts on a conference call that the latest iPhone 5 was heavily backlogged but the company had mostly worked out kinks in its iPhone supply chain.

Apple shipped 26.9 million iPhones in the last quarter, somewhat higher than the 25 million to 26 million that Wall Street analysts had predicted. But sales of the iPad came in at 14 million, well below lowered forecasts for the tablet as the economy remained weak and consumers awaited the iPad mini, which will hit store shelves next month.

"Apple is very well-positioned with the iPad and now the iPad mini. It has a great smartphone and we expect the iPhone 5 to sell very well. The outlook is conservative but that's not surprising. Err on the side of caution is a proven formula."

Apple heads into the current quarter after refreshing almost all of its product lines, including introducing an upgraded, fourth-generation full-sized iPad. The December quarter will show how well consumers respond to Apple's latest gamble - the iPad mini that will go on sale on November 2.

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