iPhone, iPad boost chip sales for wireless devices

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The demand for smartphones and tablets is causing manufacturers to spend more on chips for wireless devices than for traditional computers, says a report out yesterday from IHS iSuppli.

As the tech industry shifts more of its emphasis from PCs to mobile gadgets, the wireless segment is poised to become the leading market for chip buying starting this year.

Manufacturers will buy $55.4 billion of semiconductors for wireless devices this year, a jump of 10.7 percent from 2010, according to IHS. But spending on chips for computers will reach $53.1 billion this year, a gain of just 1.2 percent from last year.

(Credit: IHS iSuppli)

"Led by Apple Inc.'s iPhone and iPad, demand is booming for smartphones and tablet devices," IHS semiconductor analyst Wenlie Ye said in a statement. "This is spurring a surge in sales of semiconductors used in wireless devices, including baseband chips, applications processors, and mobile memory. With overall sales growth for PCs slowing, the balance of power in the semiconductor industry is shifting toward the wireless segment."

Apple has been a huge contributor to that shift. Driven by demand for the iPhone and iPad, Apple became the world's largest OEM semiconductor buyer last year, moving past long-time leader Hewlett-Packard.

That swing is significant since Apple is more of a wireless device seller, spending 61 percent of its chip budget last year on mobile devices. In contrast, HP is primarily a PC maker, allocating 82 percent of its chip budget in 2010 for desktops, laptops, and servers. Apple is expected to further outpace HP in chip spending both this year and next, IHS noted.

Related stories:
‧ Apple now world's largest semiconductor buyer
‧ Semiconductor sales rebound 24 percent in 2010
‧ Apple's A6 chip in pilot production

The wireless market as defined by IHS includes not just mobile phones and tablets but also routers, base stations, and related gear.

Although semiconductor spending for PCs has been hit by slower growth, the segment is still alive and kicking. Notebook sales in particular continue to rise, ensuring that PC-related chip buying isn't likely to shrink significantly over the foreseeable future, added IHS.

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Lance Whitney wears a few different technology hats--journalist, Web developer, and software trainer. He's a contributing editor for Microsoft TechNet Magazine and writes for other computer publications and Web sites. Lance is a member of the CNET Blog Network, and he is not an employee of CNET.

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Rival Tablets Could Trim iPad Sales in European Market

Apple's iPad absolutely dominates the tablet scene in the U.S., and few analysts expect that to change anytime soon. But that may not be the case in Europe.

According to a new report from Forrester Research, Apple's rivals may fare better in Europe -- with some caveats. So says Sarah Rotman Epps, author of a Forrester report released Tuesday on the European tablet market.

"With the recent launch (and huge marketing push) of the Acer Iconia Tab and Samsung Galaxy Tab 10.1 in multiple European countries, one might think that things were looking up for Android tablets in Europe -- but that's not the case," Epps wrote in a blog post.

Small Window of Opportunity

The good news is that Europe is and will remain a huge market for tablets. Forrester predicts that EMEA (Europe, Middle East, and Africa) will account for 14.5 million, or 30 percent, of worldwide consumer tablet sales in 2011. Three times the number of Europeans who have tablets today say they are interested in buying one in the future.

Apple also has a stronghold in the United Kingdom, but beyond the shores of the U.S. ally Forrester said tablet makers could find opportunities to compete against the iPad maker. It offered some stats to help paint the picture of Apple and its tablet competition in Europe. Apple has 52 Stores in Europe, but 30 of them are in the U.K. That compares to 238 Apple stores in the U.S.

"Apple's brand and channel presence is not uniformly strong in Europe. Mac ownership, for example, is lower in every EU-7 country than it is in the U.S.," Rotman said. "But no competitor has met Apple's challenge. Despite Apple's potential vulnerability, we estimate that Apple still has 70 percent market share for tablet sell-through to consumers in Europe."

Focus on Price

She was quick to point out that sell-through is different from shipments. Forrester interviews with European retailers confirmed that non-iPad tablets are sitting in the retail channel. In other words, manufacturers are shipping more tablets than consumers are buying. As she sees it, iPad competitors' prices are too high, and no competitor has matched Apple on content or channel strategy. What does this mean?

"Low-cost tablets from ODMs like Huawei and ZTE will put downward pricing pressure on the market, but consumers need more than a lower price tag to buy. Sony, which has a strong brand and channel presence in Europe but tends to price on the high end, may have some success with its upcoming Sony S1 tablet," Rotman said. "But truly radical disruption requires (creating a new experience), as we expect Amazon to do in the U.S. Without a radical Amazon-like disruptor, Europeans are likely to buy an iPad -- or wait for something truly different to come along."

Apple's Tablet World

Michael Gartenberg, an analyst at Gartner, said competing with Apple's iPad anywhere in the world boils down to this fundamental question: Why should consumers should buy a competing tablet as opposed to an iPad, which is rapidly becoming the standard for tablets in terms of price, features and applications?

"Apple is still dominating by a very large margin," Gartenberg said. "Certainly a lot of these competitive products are great products in and of themselves in a world where Apple doesn't exist. But unfortunately for them, Apple is around."

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Popular iPad cutting into computer sales

Hewlett-Packard Co.'s consumer PC sales plunged 23 percent last quarter, and the company lopped $1 billion off its annual sales forecast. And while rival Dell Inc. beat analysts' estimates because of corporate demand, its sales to consumers slumped 7.5 percent. More than 70 million tablets like the Apple Inc. iPad will be sold in 2011, a total that will balloon to 246 million in three years, according to Jefferies & Co.

"You're walking into a buzz saw," Jane Snorek, a senior research analyst at Nuveen Asset Management in Milwaukee, said of the iPad. Her firm manages more than $200 billion in assets. "The tablet is going to replace at least the home computer."

At 7.3 inches across, with a color screen and an array of popular downloadable games like Angry Birds, applications for watching movies and reading magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales than analysts and executives predicted.

Apple, based in Cupertino and run by Steve Jobs, sold 4.69 million iPads last quarter, for a total of about 20 million since the device was released in April 2010.

The PC market, by contrast, declined last quarter. Global shipments fell 3.2 percent, hurt in part because some people bought tablets instead, research firm IDC reported last month.

While rivals including Research In Motion Ltd., Motorola Mobility Holdings Inc. and Samsung Electronics Co. have begun selling tablets, those have yet to gain wide acceptance.

The lack of viable competitors was felt across the PC industry in the first quarter. Microsoft Windows sales fell 4.4 percent to $4.45 billion. Its net income of $5.23 billion was eclipsed by the $5.99 billion reported by Apple, which topped its rival in that measure for the first time in 20 years.

At Intel, whose processors run more than 80 percent of the world's personal computers, growth in the PC-chip division came mainly from emerging markets and corporate sales.

Hewlett-Packard, the top PC maker, on Tuesday cut 20 cents per share from its annual earnings forecast, to $5, excluding items. The revised outlook sent the shares tumbling 7.3 percent on the New York Stock Exchange on Tuesday and left the stock down 12 percent since the last business day before L?o Apotheker took over as chief executive officer on Nov. 1.

"L?o comes in just as the tablet is taking off, and the consumer PC market is waning," Snorek said.

In a conference call Wednesday, Apotheker bemoaned a "bifurcated" PC market, where companies are spending and consumers aren't. Sales in the company's personal systems group fell 5.4 percent to $9.42 billion last quarter.

At Hewlett-Packard, full-year sales will be $129 billion to $130 billion. In February, HP had predicted full-year sales of $130 billion to $131.5 billion and earnings of at least $5.20 per share. Third-quarter forecasts from HP also missed analysts' estimates.

Dell was able to top estimates with its quarterly results Tuesday because of demand from businesses. Its sales to consumers fell partly because of competition with the iPad and other tablets, said Brian Gladden, chief financial officer of the Texas company.

"It's clearly a topic of discussion and it's a factor that's impacting the weak consumer demand," he said in an interview.

Market data provided by Bloomberg News

This article appeared on page D - 2 of the San?Francisco?Chronicle

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IPad’s ‘Buzz Saw’ Success Cuts Into PC Sales

 More than 70 million tablets like the Apple Inc. iPad will be sold in 2011, a total that will balloon to 246 million in three years, Jefferies & Co. said yesterday. Photographer: George Frey/Bloomberg

May 17 (Bloomberg) -- Shannon Cross, an analyst at Cross Research, talks about Dell Inc. and Hewlett-Packard Co.'s earnings and outlook. Cross speaks with Julie Hyman and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)

March 18 (Bloomberg) -- Tracy Tsai, an analyst at researcher Gartner Inc., talks about Hewlett Packard Co. and Dell Inc. Hewlett-Packard, the biggest personal-computer maker, cut a billion dollars from its sales forecast for the year and missed analysts’ profit projections as consumers shunned PCs and services margins narrowed. Dell, the world’s second-largest PC maker, reported first-quarter profit that topped analysts’ estimates, bolstered by corporate technology spending. Tsai speaks from Taipei with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Customers line up to buy Apple Inc.'s iPad 2 at the Apple store in San Francisco. Photographer: David Paul Morris/Bloomberg

The iPad is wreaking havoc on the personal-computer market.

Hewlett-Packard Co. (HPQ)’s consumer PC sales plunged 23 percent last quarter, and the company lopped $1 billion off its annual sales forecast. And while rival Dell Inc. (DELL) beat analysts’ estimates because of corporate demand, its sales to consumers slumped 7.5 percent. More than 70 million tablets like the Apple Inc. (AAPL) iPad will be sold in 2011, a total that will balloon to 246 million in three years, Jefferies & Co. said yesterday.

“You’re walking into a buzz saw,” Jane Snorek, a senior research analyst at Nuveen Asset Management in Milwaukee, said of the iPad. Her firm manages more than $200 billion in assets. “The tablet is going to replace at least the home computer.”

At 7.3-inches across with a color screen and an array of popular downloadable games like “Angry Birds,” applications for watching movies and reading magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales than analysts and executives predicted.

Apple, based in Cupertino, California, and run by Steve Jobs, sold 4.69 million iPads last quarter, for a total of about 20 million since the April 2010 debut. Apple shares increased $3.73, or 1.1 percent, to $339.87 at 4 p.m. New York time in Nasdaq Stock Market composite trading, for the biggest gain in almost four weeks.

The PC market, by contrast, declined last quarter. Global shipments fell 3.2 percent, hurt in part because some consumers bought tablets instead, research firm IDC reported last month.

While rivals including Research In Motion Ltd. (RIM), Motorola Mobility Holdings Inc. and Samsung Electronics Co. have begun selling tablets, the devices have yet to gain wide traction.

The lack of viable competitors was felt across the PC industry in the first quarter. Microsoft Windows sales fell 4.4 percent to $4.45 billion. Its net income of $5.23 billion was eclipsed by the $5.99 billion reported by Apple, which topped its rival in that measure for the first time in 20 years.

At Intel, whose processors run more than 80 percent of the world’s personal computers, growth in the PC-chip division came mainly from emerging markets and corporate sales.

Hewlett-Packard, the top PC maker, yesterday cleaved 20 cents a share from its annual earnings forecast, to $5, excluding items. The revised outlook sent the shares tumbling 7.3 percent on the New York Stock Exchange yesterday and left the stock down 12 percent since the last business day before Nov. 1, when Leo Apotheker took over as chief executive officer.

“Leo comes in just as the tablet is taking off, and the consumer PC market is waning,” Snorek said.

In a conference call yesterday, Apotheker bemoaned a “bifurcated” PC market, where companies are spending and consumers aren’t. Sales in the company’s personal systems group fell 5.4 percent to $9.42 billion last quarter.

At Hewlett-Packard, full-year sales will be $129 billion to $130 billion. In February, HP had predicted full-year sales of $130 billion to $131.5 billion and earnings of at least $5.20 a share. Third-quarter forecasts from HP also missed analysts’ estimates.

Dell was able to top analysts’ estimates with its quarterly results yesterday because of demand from businesses. Its sales to consumers fell partly due to competition with the iPad and other tablets, said Brian Gladden, chief financial officer of the Round Rock, Texas-based company.

“It’s clearly a topic of discussion and it’s a factor that’s impacting the weak consumer demand,” he said in an interview.

The success of the iPad, along with the iPhone and new versions of the Mac, helped Apple supplant Microsoft as the world’s most valuable technology company last year.

“In terms of the rise of tablets and Apple doing extremely well, that clearly impacts all the stakeholders in the space,” said Abhey Lamba, an analyst at International Strategy & Investment Group in New York.

Hewlett-Packard plans to deliver a tablet called the TouchPad this summer. The device will run the WebOS operating system, which the company acquired when it bought Palm Inc. last year. WebOS also runs on smartphones and will appear on Hewlett- Packard PCs next year.

Intel is redesigning its chips to use less power and work better with tablets, the company told analysts yesterday.

CEO Paul Otellini said the company will design future products to make its chips more appealing for use in smartphones and tablets. He’s trying to lessen his company’s dependence on the PC market and have it profit more directly from demand for tablets and phones, a market where Intel’s chips have lost out to rival designs.

Microsoft plans to release version of Windows optimized for touch-screen tablets next year.

Companies that aren’t selling tablets risk getting left behind, said Tony Ursillo, an analyst at Loomis Sayles & Co.

“Most of the growth is going to come on the tablet side,” he said.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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Apple iPad a 'buzzsaw' through PC sales

Pizza Hut is set to introduce iPad and Android apps that expand on the chain’s successful iPhone app to let you order pizza from anywhere. New features of the apps, which launched Thursday, include access to the full Pizza Hut menu and limited time offers, guest checkout that lets customers order without checking in and a “most popular” items section. In 2009, Pizza Hut released its iPhone app, and the company claims to have been the first player in the pizza segment to do so. Within three months, the app had generated more than $1 million in sales.

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iPad Sales Slow But Apple Still Lord Of Tablet Land

May. 17 2011 - 12:42 pm | 4,753 views | 0 recommendations |  Samsung's galaxy is an iPad challenger

Apple reported a strong second quarter, allaying concerns over supply constraints caused by the Japan quake and tsunami. It reported higher than expected iPhone sales which boosted the company’s overall revenues and profits.

However, iPad sales declined from 7.3 million in Q1 of fiscal 2011 to 4.7 million in Q2 due to complications with planning and product transitions, according to management. [] We see this is a short-term non-issue and forecast healthy growth for the iPad sales, which contend with tablets from Samsung, Motorola Mobility, Research in Motion and Dell.

Demand Outlook is Strong

Apple maintains that demand for the iPad 2 is staggering and that it has a heavy backlog. It expects sales to almost double next quarter as manufacturing ramps up. []

While we anticipate total iPad sales will cross 54 million by the end of our forecast period, Trefis members predict the sales will reach close to 62 million. The member estimates have a very small impact on Apple’s stock, since the iPad constitutes around 7% of Apple’s stock value by our estimates.

Competition from Xoom, Galaxy Persists, But iPad Still Rules

Apple’s iPad continues to face competition from Samsung’s Galaxy and Motorola Mobility’s Xoom tablets. We discussed in our earlier note, Xoom Could Take a Bite Out of iPad’s Profitability, how Xoom is offering competitive features like 3G network and a higher memory at competitive prices compared to the iPad. But these two companies still form a small fraction of the larger tablet market, which is mainly dominated by the iPad. According to a recent Nielsen survey, iPad owns around 82% of the tablet market followed by Samsung with 4%, Dell with 3% and Motorola with 2%. []

Even in terms of customer satisfaction the iPad seems to be doing better. According to ITG Investment Research, Samsung Galaxy Tab had a return rate of 16%, while iPad return rate since its debut has been 2%. []

We currently have a Trefis price estimate of $420 for Apple’s stock, about 28% above the current market price.

Our complete analysis for Apple’s stock is here.

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

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Apple IPad’s ‘Buzz Saw’ Success Cuts Into PC Sales

May 18, 2011, 4:48 PM EDT By Aaron Ricadela and Dina Bass

(Updates with closing shares in the fifth paragraph.)

May 18 (Bloomberg) -- The iPad is wreaking havoc on the personal-computer market.

Hewlett-Packard Co.’s consumer PC sales plunged 23 percent last quarter, and the company lopped $1 billion off its annual sales forecast. And while rival Dell Inc. beat analysts’ estimates because of corporate demand, its sales to consumers slumped 7.5 percent. More than 70 million tablets like the Apple Inc. iPad will be sold in 2011, a total that will balloon to 246 million in three years, Jefferies & Co. said yesterday.

“You’re walking into a buzz saw,” Jane Snorek, a senior research analyst at Nuveen Asset Management in Milwaukee, said of the iPad. Her firm manages more than $200 billion in assets. “The tablet is going to replace at least the home computer.”

At 7.3-inches across with a color screen and an array of popular downloadable games like “Angry Birds,” applications for watching movies and reading magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales than analysts and executives predicted.

Apple, based in Cupertino, California, and run by Steve Jobs, sold 4.69 million iPads last quarter, for a total of about 20 million since the April 2010 debut. Apple shares increased $3.73, or 1.1 percent, to $339.87 at 4 p.m. New York time in Nasdaq Stock Market composite trading, for the biggest gain in almost four weeks.

The PC market, by contrast, declined last quarter. Global shipments fell 3.2 percent, hurt in part because some consumers bought tablets instead, research firm IDC reported last month.

While rivals including Research In Motion Ltd., Motorola Mobility Holdings Inc. and Samsung Electronics Co. have begun selling tablets, the devices have yet to gain wide traction.

Microsoft, Intel Impact

The lack of viable competitors was felt across the PC industry in the first quarter. Microsoft Windows sales fell 4.4 percent to $4.45 billion. Its net income of $5.23 billion was eclipsed by the $5.99 billion reported by Apple, which topped its rival in that measure for the first time in 20 years.

At Intel, whose processors run more than 80 percent of the world’s personal computers, growth in the PC-chip division came mainly from emerging markets and corporate sales.

Hewlett-Packard, the top PC maker, yesterday cleaved 20 cents a share from its annual earnings forecast, to $5, excluding items. The revised outlook sent the shares tumbling 7.3 percent on the New York Stock Exchange yesterday and left the stock down 12 percent since the last business day before Nov. 1, when Leo Apotheker took over as chief executive officer.

“Leo comes in just as the tablet is taking off, and the consumer PC market is waning,” Snorek said.

‘Bifurcated Market’

In a conference call yesterday, Apotheker bemoaned a “bifurcated” PC market, where companies are spending and consumers aren’t. Sales in the company’s personal systems group fell 5.4 percent to $9.42 billion last quarter.

At Hewlett-Packard, full-year sales will be $129 billion to $130 billion. In February, HP had predicted full-year sales of $130 billion to $131.5 billion and earnings of at least $5.20 a share. Third-quarter forecasts from HP also missed analysts’ estimates.

Dell was able to top analysts’ estimates with its quarterly results yesterday because of demand from businesses. Its sales to consumers fell partly due to competition with the iPad and other tablets, said Brian Gladden, chief financial officer of the Round Rock, Texas-based company.

“It’s clearly a topic of discussion and it’s a factor that’s impacting the weak consumer demand,” he said in an interview.

The success of the iPad, along with the iPhone and new versions of the Mac, helped Apple supplant Microsoft as the world’s most valuable technology company last year.

Apple’s Gains

“In terms of the rise of tablets and Apple doing extremely well, that clearly impacts all the stakeholders in the space,” said Abhey Lamba, an analyst at International Strategy & Investment Group in New York.

Hewlett-Packard plans to deliver a tablet called the TouchPad this summer. The device will run the WebOS operating system, which the company acquired when it bought Palm Inc. last year. WebOS also runs on smartphones and will appear on Hewlett- Packard PCs next year.

Intel is redesigning its chips to use less power and work better with tablets, the company told analysts yesterday.

CEO Paul Otellini said the company will design future products to make its chips more appealing for use in smartphones and tablets. He’s trying to lessen his company’s dependence on the PC market and have it profit more directly from demand for tablets and phones, a market where Intel’s chips have lost out to rival designs.

Microsoft plans to release version of Windows optimized for touch-screen tablets next year.

Companies that aren’t selling tablets risk getting left behind, said Tony Ursillo, an analyst at Loomis Sayles & Co.

“Most of the growth is going to come on the tablet side,” he said.

--With assistance by Ian King in San Francisco. Editors: Tom Giles, Nick Turner

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

View the original article here

IPad 'buzz saw' cuts PC sales at HP, Dell

The iPad is wreaking havoc on the personal-computer market.

Hewlett-Packard?s consumer PC sales plunged 23 percent last quarter, and the company lopped $1 billion off its annual sales forecast. And while rival Dell beat analysts' estimates because of corporate demand, its sales to consumers slumped 7.5 percent. More than 70 million tablets like the Apple iPad will be sold in 2011, a total that will balloon to 246 million in three years, Jefferies & Co. said.

?You're walking into a buzz saw,? Jane Snorek, a senior research analyst at Nuveen Asset Management in Milwaukee, said of the iPad. ?The tablet is going to replace at least the home computer.?

At 7.3-inches across with a color screen and an array of popular downloadable games like ?Angry Birds,? applications for watching movies and reading magazines, and software for word processing and spreadsheets, the iPad has siphoned off more PC sales than analysts and executives predicted.

Apple sold 4.69 million iPads last quarter, for a total of about 20 million since the April 2010 debut.

The PC market, by contrast, declined last quarter. Global shipments fell 3.2 percent, hurt in part because some consumers bought tablets instead, research firm IDC reported last month.

While rivals including Research In Motion, Motorola Mobility Holdings and Samsung Electronics have begun selling tablets, the devices have yet to gain wide traction.

The lack of viable competitors was felt across the PC industry in the first quarter. Microsoft Windows sales fell 4.4 percent to $4.45 billion. Its net income of $5.23 billion was eclipsed by the $5.99 billion reported by Apple, which topped its rival in that measure for the first time in 20 years.

At Intel, whose processors run more than 80 percent of the world's personal computers, growth in the PC-chip division came mainly from emerging markets and corporate sales. Hewlett-Packard, the top PC maker, Tuesday cleaved 20 cents a share from its annual earnings per share forecast, to $5, excluding items.

Microsoft plans to release version of Windows optimized for touch-screen tablets next year.

Companies that aren't selling tablets risk getting left behind, said Tony Ursillo, an analyst at Loomis Sayles & Co.

?Most of the growth is going to come on the tablet side,? he said.

With assistance by Ian King in San Francisco.

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iPad 2 Sales Come to a Halt at Two South Korean Carriers

South Korea's top two carriers have stopped selling the iPad 2 online due to shortages, Reuters is reporting.

Even though it's been less than a week since the iPad 2 went on sale in the country, SK Telecom and KT Corp were unable to sell Apple's second-generation tablet on Tuesday because supplies of the device were so limited.

"Our iPad 2 inventory has been depleted and we apologize for failing to provide enough supplies due to the product's global supply shortages," SK Telecom said on its Web site.

Neither company has disclosed just how many iPads they have sold. However, it's undeniable that sales of Apple's wildly popular tablet have been strong. The iPad 2 debuted in the U.S. on March 11, and Apple reportedly sold nearly a half a million iPad 2s in that first weekend, after which wait time for the device went up to five weeks.

Apple expanded the device to 25 additional countries on March 25, and it reportedly sold out just as quickly. The iPad 2launched in a dozen more countries including South Korea on April 29, where it seems Apple is experiencing similar issues with supply.

Apparently Apple hasn't been able to keep up with demand for the iPad 2, and it reported a decline in iPad sales in its most recent earnings report. Apple sold 4.69 million iPads in the last quarter, a sharp decline from the 7.33 million iPads sold during the fourth quarter, though that included the peak holiday sales season.

In the call, the company's chief operating officer Tim Cook said the company faces "the mother of all backlogs" with the iPad 2.

The reason for the backlog isn't clear, but it's been blamed on a few problems, including a manufacturing glitch, a shortage in touch screen LCD panels, and a shortage in the iPad 2's new speaker.

http://seeebook.com/

iPad’s miss in sales prompts cut in forecast

SAN FRANCISCO - Apple Inc surprised no one with yet another quarter packed with spectacular numbers. But a miss in sales targets on the iPad may prompt some to temper their lofty views.

Apart from the iPad hiccup, investors appeared uniformly delighted with the near-doubling of the company’s profit, sending its stock up 2 percent.

The stunning showing -- again -- alleviated Wall Street’s main concern: pressure on margins from Japan’s disaster. And it seemed a sterling report card for Tim Cook, the heir apparent to Steve Jobs, now on his third medical leave and widely expected not to return.

But Apple will face some tough year-over-year comparisons in coming quarters. Its double-digit growth rate on sales, which skyrocketed 83 percent to nearly $25 billion last quarter, may be hard to sustain.

"They are going to have comparison issues on the growth side," said Michael Walker, portfolio manager at WP Stewart. "They can’t grow 83 percent forever. There’s no way."

Apple sold fewer-than-expected iPads, at a little under 5 million versus estimates of up to 6 million, as the transition to a new model and Japanese supply chain tangles triggered shortages of critical components.

IHS iSuppli now estimates Apple will ship 39.7 million units for all models of the iPad this year, slashing 9.2 percent off its February figure of 43.7 million.

"While Apple is now on track to significantly increase its production volume in the second quarter, the company reportedly is still falling substantially short of its target production goal for April," said Rhoda Alexander, director of monitor research at IHS.

Still, at 39.7 million, IHS’ forecast is on the higher side of Street estimates. BofA Merrill Lynch took down its forecast for iPad sales a tad to 26.4 million from 26.8 million. JPMorgan now estimates Apple selling 27.3 million, down from 28.9 million.

Investors remain wary of the dangers a prolonged logistics disruption in Japan -- which supplies more than one-tenth of the world’s electronics -- pose to the global tech supply chain. Apple is said to rely on Asia’s second-largest economy for crucial touchscreen and internal components.

Shares of Apple ended last week up 2.4 percent at $350.70. But that only brings the world’s most valuable technology company back to where it was before the March 11 earthquake.

Cuts aside, the company is on a tear and demand has never been an issue. Sales of the iPhone more than doubled, and made up almost half of revenue in the March quarter. On the iPad 2, Apple said it sold every one it could make.

On Thursday, more than 10 brokerages raised their price target on the stock, with Ticonderoga Securities expecting the shares to touch $612 in the next year.

"Is (Apple) a grown-up company? Yes. Is it a well managed company? Absolutely," Alex Gauna, analyst with JMP Securities, said. "Does it have talent internally beyond Steve Jobs? It sure does."

Under Cook, Apple embarked on a global roll-out of one of its most high-profile products, the iPad2, that was largely successful despite a slow global economy and a major earthquake in Japan, which houses hundreds of its parts suppliers.

Apple saw a limited impact in the quarter on supply or component pricing from the disaster and said it did not see any unsolvable problems.

"The fact that they keep performing quarter in, quarter out, is a testament to the bench strength of management talent," said Barry Jaruzelski, a partner with Booz and Co who leads its global technology practice.

The big growth story, though, is causing him to wonder if the law of large numbers may soon catch up.

"To grow 10 percent of a $100 billion company, which is now their run rate ... you need to find $10 billion of new revenue," Jaruzelski said. "That means you need to find one and half Fortune 500 companies each year just to grow 10 percent."

But investors are not too worried for now, given its enviable place with well-designed products and market dominance.

"People who worry about the size of Apple don’t understand the sheer size of the markets they are selling in," Walker said. "One way we look at it is that there is about $950 billion spent on IT every year."

"Apple addresses almost $600 billion of that $900 billion." – Reuters

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iPad 2 Suppliers Gearing Up for Sales Above Estimates

Unnamed sources told DigiTimes Wednesday that Apple took delivery of an estimated 2.4 million to 2.6 million iPad 2s in March. The Taiwan-based electronics industry newspaper also reported that unnamed parts suppliers expect Apple to take delivery of an estimated four million to 4.3 million iPad 2s per month through the end of June.

The touchscreen makers in Apple's iPad 2 supply chain are reportedly racing to expand their production capacities to keep up with demand. The goal is to be able to produce enough parts for Apple to ship an estimated 12 million iPad 2s in the second quarter.

If correct, the numbers coming out of Taiwan would dramatically exceed analysts' expectations. "We are at 5.5 million iPads in the March 2011 quarter and at 5.6 million iPads in the June 2011 quarter," noted Piper Jaffray analyst Andrew Murphy Wednesday in an e-mail. "So the DigiTimes numbers are higher than our June 2011 quarter estimate."

Rising Teen Interest

Late last month, Piper Jaffray's analysts noted the long lead times at Apple's online store when the iPad 2 launched in 25 countries on March 25, suggesting strong demand worldwide. Moreover, U.S. demand for the iPad 2 likewise exceeded expectations.

"Never before have we seen lines as long or as persistent as the iPad 2 lines at U.S. Apple stores," noted Piper Jaffray analysts Gene Munster, Michael Olson, and Andrew Murphy in a report last month. "Given strong demand and improving supply, we believe our estimate of 5.5 million iPads in the [first] quarter could be conservative."

A new Piper Jaffray report released Monday demonstrates that interest in Apple's iPad 2 and iPhone is also on the rise among teenagers, with 37 percent of the 4,500 students surveyed indicating they expect to buy an iPhone in the next six months. What's more, 20 percent said they expect to buy a tablet during the same period.

"We believe the teen demographic is a critical component of long-term growth in the mobile market, and Apple is taking its lead in music and leveraging it in the mobile category," Munster, Olson and Murphy explained. The analysts also see rising interest in tablets among teenagers as "a positive for Apple, given the iPad's dominant position in the tablet market."

And according to a Piper Jaffray survey of recent iPad 2 purchasers, Apple is continuing to expand its base of iPad users overall, with 70 percent of the iPad 2 buyers surveyed being new customers. "We believe this shows Apple is expanding its base of iPad users, which is critical to maintaining its early lead in the growing tablet market," Munster, Olson and Murphy said.

The Main Constraint

IDC forecasts that 44.6 million media tablets will ship worldwide this year, with the U.S. representing nearly 40 percent of the total. Although more competing tablets are slated to launch later this year, the firm's analysts expect Apple to maintain a 70 to 80 percent share of the market, which equates to 31.2 million to 35.7 million units for the entire year, or between 2.6 million and 2.7 million iPad shipments per month.

According to Piper Jaffray, the main constraints on Apple's iPad 2 sales in the months ahead are likely to be supply-side issues -- especially those that arose in the wake of Japan's horrific earthquake and tsunami last month.

"We believe the constraints caused by shuttering Japanese manufacturing facilities will cause a temporary supply disruption through the June quarter," Munster, Olson and Murphy noted last month. "But we also note that demand is stronger than ever."

One mitigating factor is that Apple buys key components in advance and makes large pre-payments that guarantee both supply and pricing. "This strategy may prove particularly helpful if supply is limited and pricing increases," Munster, Olson and Murphy noted.

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