Apple explains slow second quarter iPad sales

The biggest loser in Apple’s powerhouse second quarter was by far the iPad, which managed to ship just 4.69 million units when analysts expected somewhere between 6 and 8 million.

During its earnings call today, Apple CFO Peter Oppenheimer made it clear that the company simply couldn’t make enough iPads: “We sold every iPad 2 we could make,” he said.

COO Tim Cook also dispelled assumptions that the Japanese earthquake had anything to do with Apple’s iPad supply trouble, saying on the call that the company “did not have any supply or cost impact” over the last three months. Cook went on to say that Apple will “produce a very large number [of iPads] for the quarter,” but he’s still unsure if that will meet consumer demand.

When asked to elaborate on what exactly is keeping up iPad production, Apple just mentioned that it’s still working through its backlog of production (Cook described it as “the mother of all backlogs”). The company also hinted to another caller that it had trouble projecting production for the iPad versus iPad 2, something that needed to be done well ahead of time.

Apple’s iPad shipments this past quarter were higher than the first two quarters that the iPad was available, but significantly lower than the 7.5 million units that Apple shipped over the holiday period. With the launch of the iPad 2 in March, Apple was definitely aiming higher than last year’s iPad launch with availability in more retails stores in the US, as well more countries internationally. At the end of March, Apple launched the iPad 2 in additional 25 countries, which put an additional stress on demand.

  • Starman_Andromeda

    So, what's your judgment of what's going on? Did people hold off buying iPads in anticipation of the iPad 2? Are tablets slowing down even as they speed up?

  • Zenism

    They sold every unit manufactured. What losers. Another tripe article, with a click-bait title.

  • http://www.devindra.org Devindra Hardawar

    Given the amount of people that have had trouble getting iPad 2's, I'm inclined to believe Apple here. It seems like something in production is stalling them, the big question is what. Consumers may have waited for the iPad 2 instead of purchasing an iPad, but that alone wouldn't explain the shipment numbers.

  • http://www.devindra.org Devindra Hardawar

    Learn to read: The sold every iPad 2 they could manufacture

  • http://chidio.wordpress.com/ ChidiO

    I cannot understand the point you are making.What is it?

  • Zenism

    So, I have to assume that you're saying that Apple has some pile of original iPads laying about? Akin to the Xoom units that Moto is said to have laying around? If this is the case, then say so. Your title reads that sales were slow. Seems to me that demand outpaced supply. Not the definition of “slow” sales.My original post stands…

  • Zenism

    I, in a sarcastic fashion, called Apple losers for selling out of units.

  • http://twitter.com/Fadiqa Fadi Qayed

    If a company cannot forecast demand for its products, or doesn't have the resources to fulfil that foretasted demand, doesn't that still count as an operational failure?

  • wired-4058

    Then what are you trying to insinuate, if you are that good why don't you set up a company and create things people want instead of being a blogger and talk trash about Apple all the time.Make some things which we want and then we see what you really are – the real thing or just a hack.

  • http://www.devindra.org Devindra Hardawar

    Yes. There is a pile of old iPads sitting around, that's existing stock. I don't think you know how this works fanboy.

  • chandrac1

    Yes, Fadi, operational failure, perhaps in that very limited sense, but Apple has had another glorious win overall. The language being used about success and failure is too extreme, by fans and haters alike. None of it matters. It is the actual business performance, in dollars and cents, that matters. That is all. Look at Apple's performance for the past five years, 20 quarters, in context, and then see if you can find any company that comes even close. Don't mention Google though, because they make nothing tangible. They allow dumb shits like HTC, Samsung, Motorola and others take all the risks while they cream off the ad revenue with no sharing with their partners.Every organisation in the Galaxy would die to be in Apple's position, where they sell-out everything they can make, not just on launch day, but for weeks and months after that – as is the case with iPad 2. Ever since Tim Cook arrived at Apple, they have never had a dead inventory problem. The downside is that you manage production orders very tightly throughout a product's life cycle. To call that operational failure is just the cynical ignorance and dumb-whack talk of people who could not organise a drunken orgy – even in a brewery. Before you pass your wise judgments on Apple, Fadi, you need to look at the wannabe iPad killer makers out there, all nervously biting their nails and holding their breath in disbelief and jealousy at what Apple is achieving. They are holding off or cancelling their own production orders because they cannot project ANY number of tablets to produce that they know just WON'T sell. Now that is operational success, because they have decided not to make any wasted, joke, inventory that nobody wants. But it is business franchise failure because they don't know how to make (copy/steal ideas) knock-offs that ANYONE with even just two working brain cells would want to buy. They don't know how to innovate themselves. They can't even copy something better than the original.So, who exactly is the dumb operator here?Apple?Hardly.Yippee! What a stellar result for 11Q2.I could buy a Brabus Merc 500 with just a small portion of my overnight gains. As an investor and as a loyal 35-year customer, Apple has made me more money over the years than any other source I benefit from.Operational success, with bells on, I say.Chandra Coomaraswamy

  • Zenism

    Fanboy? Spare me. Your article failed to mention “a pile of old iPads sitting around”. I'm now bored with this. Continue tripe slinging…

  • Leland

    The guy in charge of predicting demand is going to be shot for this. Thats hundreds of millions of dollars lost to the supply/demand curve. :)

  • Fadiqa

    thanks for the overly long reply, your first sentence said it all, my comment was about the operational side only. Apple is great and has great products, but still i hold to my comment, they could have sold more if they were able to better forecast the demand or maybe overcome capacity constraints with their suppliers.Other companies over produce, you are right, and apple under produce, which is a better position, but still there are foregone profits.

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    [...] some disappointing sales figures for the iPad 2. For the second quarter, the company shipped just 4.69 million units — far less than projections, which had ranged between 6 and 8 million iPads [...]

  • http://luminoxwatchbands.info/1064/analysts-say-ipad-3-production-starts-this-year Analysts say iPad 3 production starts this year | luminoxwatchbands.info

    [...] to plead some unsatisfactory sales total for a iPad 2. For a second quarter, a association shipped just 4.69 million units — distant reduction than projections, that had ranged between 6 and 8 million iPads [...]

  • http://www.gizasia.com/2011/10/analysts-say-ipad-3-production-starts-this-year/ Analysts say iPad 3 production starts this year | www.gizasia.com

    [...] some disappointing sales figures for the iPad 2. For the second quarter, the company shipped just 4.69 million units — far less than projections, which had ranged between 6 and 8 million iPads [...]

  • http://prosglobal.tv/blog/2011/10/analysts-say-ipad-3-production-starts-this-year/ Analysts say iPad 3 production starts this year

    [...] some disappointing sales figures for the iPad 2. For the second quarter, the company shipped just 4.69 million units — far less than projections, which had ranged between 6 and 8 [...]

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    [...] some disappointing sales figures for the iPad 2. For the second quarter, the company shipped just 4.69 million units — far less than projections, which had ranged between 6 and 8 [...]

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    [...] contrast, Apple sold around 4.7 million iPad units in the second quarter, when its iPad 2 launched. The company stated it was selling the units as [...]

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