Apple iPhone Explodes, iPads Sizzle in Q2

Apple Inc. (Nasdaq: AAPL) posted another record-breaking quarter Wednesday as iPhone sales soared to 18.65 million, representing 113 percent growth over the previous year. The company sold 4.69 million iPads during the quarter ended March, well below analyst estimates. (See Apple Reports Q2.)

In the second quarter, Apple launched the iPhone 4 on Verizon Wireless and introduced the iPad 2. The iPhone is now on 186 carriers in 90 countries. (See Verizon Finally Gets the iPhone 4 and AT&T & Verizon Fight for iPad 2 Dominance.)

Apple posted a second-quarter profit of US$5.99 billion on revenues of $24.67 billion. Half of its revenues came from the iPhone.

Apple's slower-than-expected iPad sales weren't a result of the earthquake in Japan as some assumed. COO Tim Cook said on its earnings call that although it sources literally hundreds of products from Japan, there was no supply or cost impact.

Instead, the issue on iPad sales was that Apple is still heavily backlogged as demand outstrips supply as it expands the device to more countries and carriers.

"We sold every iPad 2 that we could make," he said on the call. He added that Apple will produce a very large number of the tablets for the next quarter, but he's still uncertain if it will meet consumer demand.

Tablets were not a huge seller for AT&T Inc. (NYSE: T), which announced its first-quarter earnings earlier on Wednesday, either. The carrier sold 322,000 tablets, down from the 442,000 it sold in the fourth quarter, but that's also the quarter in which it began selling the 3G iPad. (See AT&T Looks From iPhone to LTE to Increase Subs and AT&T's iPhone Growth Continues.)

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