April 21, 2011

Apple Profits Hampered By iPad Supplies

Having left its tenuous survival mode long behind, computer and cultural juggernaut Apple has become the envy of the technology world and does not make even the slightest of moves without thousands of eyes watching.

So what vexes this company as it releases yet another record-breaking earnings and profits statement? It could not make iPad tablets fast enough.

"We sold every iPad 2 we could make," Apple CFO Peter Oppenheimer told AP. Apple moved 4.7 million iPads of both kinds into consumers' hands in its latest quarter, below analyst expectations and the holiday quarter's sales. It launched the second version of the tablet computer two weeks before the end of the period.

Many customers put off purchasing the original iPad for the second generation version, which became difficult to find in stores along with long waits with online orders as factories reached production limits for the device.

Apple COO Tim Cook told investors on a conference call that timing production lines to the transition from one model to the next is always difficult. He said the company has to make decisions "many, many weeks in advance."

iPad production is being expanded as quickly as possible without sacrificing quality. The company is expanding sales of the tablet to 13 more countries next week, bringing the total to 39.

"I'm very confident that we can produce a very large number of iPads for the quarter," said Cook, who is known for deft management of supply chains and inventory. Electronics manufacturers of all kinds are struggling with supply disruptions for components from Japan, but Cook said there are no unsolvable problems for Apple in sight.

After launching only last April, the iPad has turned out to be the first really successful tablet computer. The company has sold a total of 19.5 million iPads through the latest quarter, AFP reports. Analysts now see it taking PC sales away from competitors.

Competing tablets running Android and Windows versions of software are being released from various other manufacturers but none have come close to matching the iPad's sales frenzy and positive reviews.

The other big subject of gossip and rumor is CEO Steve Jobs medical leave and how permanent that may be. The mercurial leader and corporate hero went on medical absence in January appointing Cook to run day-to-day operations of the company.

"We do see him on a regular basis and as we've previously said, he continues to be involved in major strategic decisions," Cook said.


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