Amazon’s Kindle Fire tablet exploded onto the scene late last year. Despite only being available for a month and a half in the holiday quarter, Amazon shipped nearly 4 million Kindle Fires in its launch quarter to take 14% of the global tablet market according to market research firm IHS iSuppli. While many touted the tablet as the iPad’s biggest competitor, Apple’s CEO Tim Cook insisted that Amazon’s tablet had absolutely no impact on iPad sales. Now, in the first quarter of 2012 it looks like the tablet that was once said to be Apple’s biggest tablet threat may have seen drastically reduced demand following Apple’s move to drop its pricing on the previous-generation iPad 2 to $399.

“The lower priced iPad 2 has seemed to offset some of the original threat of the lower priced Fire,” Barclays analyst Ben Reitzes wrote in a note to investors on Wednesday. “Many consumers seem willing to pay $399 for a feature packed tablet with a strong and developed ecosystem rather than $199 for a relatively underpowered tablet.”

Market research firm IDC issued fourth-quarter shipment estimates that were more than a million units above iSuppli’s figures, suggesting that Amazon shipped 4.8 million Kindle Fire tablets in the in its debut quarter. Last quarter, IDC says that figure dropped to just 750,000 units. Apple’s more affordable iPad 2 may very well have played a role in the staggering decline, but excessive channel fill in the fourth quarter that outpaced demand is likely the root cause of the disparity.

HTC’s new line of One-series smartphones launched on April 2nd in Europe and parts of Asia, but HTC’s performance hasn’t yet caught up to the impressive earnings it managed last year. HTC reported six consecutive months of record revenue in 2011 before increased competition from Samsung and the launch of Apple’s iPhone 4S began a steep slide that continued last month. HTC on Monday announced that its consolidated revenue for the month of April totaled NT$31.03 billion, or approximately $1.06 billion. Performance improved for the second consecutive month, up from NT$30.88 in March, but sales were down 20% from NT$38.73 in April last year. HTC’s One S smartphone launched late last month on T-Mobile and the flagship HTC One X became available from AT&T on Sunday.

Following the announcement of its next-generation flagship Galaxy S III smartphone, Samsung’s mobile boss JK Shin has revealed that the South Korea-based consumer electronics giant has its sights set sky high in 2012. According to Shin, Samsung is looking to sell 200 million smartphones this year, increasing its share of the global market to between 23% and 24%, up from 21.1% in 2011, MarketWatch reports. According to the latest numbers from market research firm Strategy Analytics, Samsung is well on its way to achieving the lofty goal; the firm estimates that Samsung sold 44.5 million smartphones into sales channels during the first quarter, pushing the company past Apple to become the No.1 vendor in the world. Shin also noted that the Galaxy S III includes various software and design modifications that will help it avoid becoming a target in the numerous patent cases Samsung currently faces.

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Samsung reported a blow-out first quarter on Friday as strong mobile phone sales helped the consumer electronics giant increase profits by 82% to a record 5.05 trillion won. The numbers were undoubtedly impressive as they stood, but market research firm Strategy Analytics helps us paint a broader picture of just how dominant Samsung’s mobile business was in the first quarter. On the smartphone side, Strategy Analytics estimates that Samsung sold a staggering 44.5 million smartphones into channels last quarter, overtaking Apple’s 35.1 million iPhones by a landslide and making Samsung the top-selling smartphone vendor in the world.

“Global smartphone shipments grew 41 percent annually to reach 145.3 million units in Q1 2012,” Strategy Analytics analyst Alex Spektor said in a statement. “Samsung overtook Apple to become the world’s largest smartphone vendor by volume with a record 31 percent market share. Samsung’s global smartphone shipments rose 253 percent annually to 44.5 million units, as demand surged for its popular Galaxy models such as the Note, S2 and Y.”

According to the firm’s estimates, Samsung’s total mobile phone shipments reached 93.5 million units in the first quarter, giving the vendor a record 25% share of the global cell phone market. Nokia’s handset shipments declined 24% to 82.7 million units in the quarter, making Samsung the No.1 mobile phone vendor in the world and ending Nokia’s 14-year run as top handset vendor.

“Nokia’s global handset shipments declined a huge 24 percent annually to 82.7 million units in Q1 2012,” Strategy Analytics’s Neil Mawston said. ”Volumes were squeezed at both ends, as low-end feature phone shipments in emerging markets stalled and high-end Microsoft Lumia smartphones were unable to offset the rapid decline of Nokia’s legacy Symbian business. Nokia was the world’s largest handset vendor between 1998 and 2011, for 14 years, before finally yielding top position to rival Samsung this quarter.”

Samsung managed to top its pre-announced earnings when it reported results for the first calendar quarter of 2012 on Friday morning. The company reported a record operating profit of 5.85 trillion Korean won, up 98%, and a consolidated net profit of $5.05 trillion won, up 82% over the same quarter last year. Revenue came in at 45.27 trillion won, beating expectations. TV and semiconductor sales were down in the quarter, but any potential impact was offset by strong sales of high-margin display panels and mobile phones. Samsung’s mobile sales grew 86% over the year-ago quarter to 18.9 trillion won, and the company’s combined operating profit margin climbed 1.7 points to 12.9%. Samsung’s full press release follows below.

Samsung Electronics Announces First Quarter 2012 Earnings Results

(SEOUL–Korea Newswire) April 27, 2012 — Samsung Electronics Co., Ltd. today announced revenues of 45.27 trillion Korean won on a consolidated basis for the first quarter ended March 31, 2012, a 22-percent increase year-on-year.

For the quarter, the company’s consolidated operating profit reached an all-time high of 5.85 trillion won representing a 98-percent increase year-on-year. Consolidated net profit for the January-March period was 5.05 trillion won.

Despite a decrease in sales of semiconductor chips and TVs due to seasonal factors, an increase in profitability in display panels and mobile phones pushed up quarterly operating profit margins by 1.7 percentage points to 12.9 percent.

In its earnings guidance disclosed on April 6, Samsung estimated first-quarter consolidated revenues would reach approximately 45 trillion won with consolidated operating profit of approximately 5.8 trillion won.

Samsung’s strong performance in the quarter was driven mainly by the IT & Mobile Communications (IM) segment, which is comprised of four businesses, Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging. In particular, solid growth in the Mobile Communications business, with brisk sales of flagship GALAXY Note and GALAXY S II devices contributed to the company’s profitability.

The consolidated operating profit for IT & Mobile Communications businesses reached 4.27 trillion won on revenue of 23.22 trillion won. The Display Panel business rebounded in the first quarter with operating gains of 280 billion won, following an uptick in demand for high-margin panels used in tablets, 3D/ LED TVs and premium OLED panels.

“Despite difficult business environments including seasonal low demand for major products such as PCs and TVs amid a global economic slowdown, we achieved record quarterly results based on our differentiated products and technology leadership. We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced,” said Robert Yi, Senior Vice President and Head of Investor Relations.

Looking into the second quarter, Samsung expects to improve profitability in the chip business with a recovery in PC DRAM price and by expanding its new product category with mobile application processors based on 32 nanometer-class process technology. Samsung plans to also bolster its competitive edge in mobile phones with the debut of new high-end smartphones, and by reinforcing the full lineup of products and its presence in emerging markets.

Capex 7.8 Trillion Won in Q1

Capital expenditure in the first quarter was 7.8 trillion won, with 5.8 trillion won invested in the Semiconductor Business and 1.3 trillion won in the Display Panel segment.

Earlier this year, Samsung announced plans to spend a total of 25 trillion won in capex for 2012.

Fifteen trillion won will be invested in the Semiconductor Business that consists of Memory and System LSI. For the Display Panel segment, 6.6 trillion won has been allocated for investment.

Organizational Change

Starting from the first quarter, the business segment financial disclosure will reflect the organizational changes, which took place in December, 2011. We will provide sales and earnings of Device Solutions, including Semiconductor and Display Panel businesses; and Digital Media & Communications, including IT & Mobile Communications and Consumer Electronics (CE) divisions.

IT & Mobile Communications includes Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging; and CE includes Visual Display and Digital Appliances.

Seasonal Factors Dampen Chip Demand

Samsung’s Semiconductor Business – including Memory and System LSI – posted an operating profit of 760 billion won in the first quarter. Revenue retreated to 7.98 trillion won on-year, a 13-percent decrease compared with the same period last year.

Weaker-than-expected off-peak season demand and a global supply crunch of HDDs coupled with low demand for PC DRAM chips and the oversupply of mobile DRAM impacted profit margins, in which the memory portion saw its revenue slip to 4.89 trillion won. For NAND, spot price remained weak due to sluggish demand compounded by early stage products from geometry migration flowing into the channel market.

Despite adverse market conditions, Samsung’s chip business was buoyed by strong demand for server DRAM and by expanding our value-added product mix such as products based on the 30-nanometer-class and 20-nanometer-class process technologies.Increased orders for Solid State Drives (SSDs) and Embedded Multimedia Cards (eMMC) also helped the chip business to cushion the market squeeze.

Looking ahead, the global HDD supply shortage is expected to be alleviated in the second quarter and demand for specialty DRAM products including mobile and server DRAMs will be strong. However, elevated competition among manufacturers of 30-nanometer-class chips will lead to a price decline.

In the second quarter, Samsung is poised to ramp up supply of high-capacity, power-efficient DRAM for servers based on our green memory solution. As for NAND, we will spur growth by expanding the 20-nanometer-class portion. Sales of CMOS image sensors will remain high in the April-June quarter, as demand for smartphones equipped with high-resolution cameras is expected to be strong.

Display Business Swings to Profit

Operating profit for the Display Panel Business turned around from the previous quarter to register 280 billion won on revenue of 8.54 trillion won in the first quarter.

Despite traditionally weak seasonality, continued economic stagnation in Europe, and the prolonged supply shortage in the PC industry, the Display Panel Business was able to improve profitability by expanding sales of high-end premium panels such as LED TV and 3D panels, which pushed TV panel sales up in the mid-20 percent range on-year. Increased sales of high-resolution panels for tablet PCs and OLED panels for smartphones also helped boost profit in the quarter.

Looking ahead, although the market for monitor panels will remain stagnant, demand for tablet and notebook panels is expected to increase on seasonal education-related demand while TV panels are expected to lift due to Chinese Labor Day sales and the London Olympics.

Moving forward with the establishment of Samsung Display Corporation, the company will continue to enhance profitability by expanding sales of premium panel products such 3D, large size and LED panels, while smartphone demand is expected to continue to fuel OLED panel sales.

Profits Propped Up by Strong Sales of Smart Devices

The IT & Mobile Communications division – including Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging – registered quarterly operating profits of 4.27 trillion won for the first period. Revenue reached 23.22 trillion won, and the mobile unit accounted for 18.90 trillion won, up 86 percent year-on-year.

Growth in shipments of Samsung’s flagship GALAXY Note and GALAXY S II and other premium mobile devices yielded high returns, with significant growth in China, Central and South America, the Middle East and Africa.

Samsung is expected to continue its strong growth momentum in the second quarter, following the announcement of the next GALAXY device in London on May 3.

The Telecommunication Systems business saw growth both in revenue and operating gains due to an increase in LTE (Long Term Evolution) wireless broadband technology equipment. In the case of IT Solutions, a boost in sales of mid-to-high-end products, including PCs and printers improved quarter-on-quarter earnings.

We expect to further solidify our leading position in LTE business in the US market and make further inroads into countries newly adopting the service.

Premium TV Sales Lift Profitability

Samsung’s Consumer Electronics businesses, which encompass Visual Display and Digital Appliances, registered an operating profit of 530 billion won in the quarter, up 550 percent year-on-year, on revenues of 10.67 trillion won.

Although weak seasonality led to a quarter-on-quarter dip in revenue, strong sales of premium TVs in developed markets and LED TVs in emerging markets saw shipments outstrip market growth and drive a sharp increase in profitability. Highlights for the quarter included an increase in sales of more than 50 percent for Samsung’s flagship 7000/8000 TV series on-year, while the Digital Appliances Business improved profitability, both on-year and on-quarter, by increasing its portion of premium product sales.

In the second quarter, market growth for flat panel TVs in the mid-single digits is expected on rising demand in emerging markets and increased sales of LED TVs which are forecast to account for over 60 percent of the TV market in the quarter. In emerging markets, Samsung aims to expand its presence with region-specific LED TV models, while its range of Smart TV models with enhanced features will continue to maintain the company’s leadership in developed markets.

As for digital appliances, demand is expected to rise led by growth in emerging markets. Samsung will aim to improve profitability in the quarter by enhancing R&D efficiencies, expanding sales of premium products and sales in emerging markets, and capitalizing on strong seasonal demand for air conditioners.

Huawei, the world’s sixth largest mobile phone vendor, said on Wednesday that it expects to ship more than 100 million mobile phones in 2012, including 60 million smartphones, Reuters reported. The Chinese company sold a total of 55 million handsets, including 20 million smartphones, in 2011 and is now looking to increase its global market share with a focus on key markets. “We plan to target China, the United States, western Europe and Japan as key markets,” said Shao Yang, chief marketing officer of Huawei Device. The executive also said he expects consumer device sales to reach $30 billion in five years, up from $7 billion, becoming as large as its telecommunications equipment business. “This means that by that time, the revenue will be comparable to our telecom equipment business,” Shao said. “We feel the room for growth for devices is much bigger than the telecom carrier sector.”

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After a rough month that saw Apple’s stock tumble nearly $90 from a high of $644 earlier this month to as low as $555.18 on Tuesday, Apple reported its earnings for the second fiscal quarter on Tuesday after the market closed. Following a last-minute round of panic that swept Wall Street, Apple posted a net profit of $11.6 billion, or$12.30 per share — up 94% year-over-year — on revenue of $39.2 billion, crushing the Street’s consensus. Analysts were expecting earnings of $10.06 per share on $36.81 billion in sales. Read on for more.

IPhone channel sales were the focus of the Street’s worries earlier on Tuesday, as a number of analysts lowered expectations following AT&T’s first-quarter earnings report. Wall Street was looking for Apple to move 30.5 million smartphones during the second fiscal quarter and the company beat expectations, selling 35.1 million iPhones into channels last quarter, up 88% from 18.65 million units in the second quarter a year earlier.

Outside of the iPhone, which has quickly become Apple’s biggest money-maker by a substantial margin, analysts were expecting Apple to sell between 12 million and 13 million iPads along with 4.4 million Macs. Actual iPad sales came in at 11.8 million units, and Apple sold 4 million Mac computers in the second fiscal quarter. Apple sold 4.69 million iPads and 3.6 million Macs in the same quarter in 2011.

Shares of Apple stock are up more than 6% in after-hours trading, and the company’s full press release follows below.

Apple Reports Second Quarter Results

Record March Quarter Sales of iPhones, iPads and Macs

Net Profit Increases 94% Year-over-Year

CUPERTINO, Calif.–(BUSINESS WIRE)–Apple® today announced financial results for its fiscal 2012 second quarter ended March 31, 2012. The Company posted quarterly revenue of $39.2 billion and quarterly net profit of $11.6 billion, or $12.30 per diluted share. These results compare to revenue of $24.7 billion and net profit of $6.0 billion, or $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4 percent compared to 41.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

“Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

The Company sold 35.1 million iPhones in the quarter, representing 88 percent unit growth over the year-ago quarter. Apple sold 11.8 million iPads during the quarter, a 151 percent unit increase over the year-ago quarter. The Company sold 4 million Macs during the quarter, a 7 percent unit increase over the year-ago quarter. Apple sold 7.7 million iPods, a 15 percent unit decline from the year-ago quarter.

“We’re thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter,” said Tim Cook, Apple’s CEO. “The new iPad is off to a great start, and across the year you’re going to see a lot more of the kind of innovation that only Apple can deliver.”

“Our record March quarter results drove $14 billion in cash flow from operations,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter, we expect revenue of about $34 billion and diluted earnings per share of about $8.68.”

Apple will provide live streaming of its Q2 2012 financial results conference call beginning at 2:00 p.m. PDT on April 24, 2012 at www.apple.com/quicktime/qtv/earningsq212. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and diluted earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2011, its Form 10-Q for the fiscal quarter ended December 31, 2011, and its Form 10-Q for the fiscal quarter ended March 31, 2012 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2012 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In millions, except number of shares which are reflected in thousands and per share amounts)
		Three Months Ended						Six Months Ended
		March 31,2012			March 26,2011			March 31,2012			March 26,2011
Net sales		$	39,186		$	24,667		$	85,519		$	51,408
Cost of sales (1)			20,622			14,449			46,252			30,892
Gross margin			18,564			10,218			39,267			20,516
Operating expenses:
Research and development (1)			841			581			1,599			1,156
Selling, general and administrative (1)			2,339			1,763			4,944			3,659
Total operating expenses			3,180			2,344			6,543			4,815
Operating income			15,384			7,874			32,724			15,701
Other income and expense			148			26			285			162
Income before provision for income taxes			15,532			7,900			33,009			15,863
Provision for income taxes			3,910			1,913			8,323			3,872
Net income		$	11,622		$	5,987		$	24,686		$	11,991
Earnings per common share:
Basic		$	12.45		$	6.49		$	26.48		$	13.02
Diluted		$	12.30		$	6.40		$	26.17		$	12.83
Shares used in computing earnings per share:
Basic			933,582			923,196			932,265			921,245
Diluted			944,893			935,944			943,185			934,549
(1) Includes stock-based compensation expense as follows:
Cost of sales		$	63		$	51		$	126		$	103
Research and development		$	168		$	104		$	328		$	217
Selling, general and administrative		$	193		$	132		$	390		$	266

Apple Inc.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In millions, except number of shares which are reflected in thousands)
		March 31, 2012			September 24, 2011
ASSETS:
Current assets:
Cash and cash equivalents		$	10,121		$	9,815
Short-term marketable securities			18,417			16,137
Accounts receivable, less allowances of $83 and $53, respectively			7,042			5,369
Inventories			1,102			776
Deferred tax assets			2,253			2,014
Vendor non-trade receivables			6,727			6,348
Other current assets			5,050			4,529
Total current assets			50,712			44,988
Long-term marketable securities			81,638			55,618
Property, plant and equipment, net			8,847			7,777
Goodwill			1,141			896
Acquired intangible assets, net			3,604			3,536
Other assets			4,992			3,556
Total assets		$	150,934		$	116,371
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable		$	17,011		$	14,632
Accrued expenses			9,778			9,247
Deferred revenue			5,247			4,091
Total current liabilities			32,036			27,970
Deferred revenue – non-current			2,446			1,686
Other non-current liabilities			13,954			10,100
Total liabilities			48,436			39,756
Commitments and contingencies
Shareholders’ equity:
Common stock, no par value; 1,800,000 shares authorized; 934,982 and 929,277 shares issued and outstanding, respectively			14,850			13,331
Retained earnings			87,124			62,841
Accumulated other comprehensive income			524			443
Total shareholders’ equity			102,498			76,615
Total liabilities and shareholders’ equity		$	150,934		$	116,371

Apple Inc.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)
		Six Months Ended
		March 31, 2012				March 26, 2011
Cash and cash equivalents, beginning of the period		$	9,815			$	11,261
Operating activities:
Net income			24,686				11,991
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation, amortization and accretion			1,461				790
Share-based compensation expense			844				586
Deferred income tax expense			2,915				1,563
Changes in operating assets and liabilities:
Accounts receivable, net			(1,663	)			(288	)
Inventories			(326	)			121
Vendor non-trade receivables			(379	)			(883	)
Other current and non-current assets			(1,510	)			(1,886	)
Accounts payable			2,809				1,626
Deferred revenue			1,916				698
Other current and non-current liabilities			778				1,674
Cash generated by operating activities			31,531				15,992
Investing activities:
Purchases of marketable securities			(85,022	)			(42,260	)
Proceeds from maturities of marketable securities			7,702				10,211
Proceeds from sales of marketable securities			49,052				21,705
Payments made in connection with business acquisitions, net of cash acquired			(350	)			0
Payments for acquisition of property, plant and equipment			(2,778	)			(1,838	)
Payments for acquisition of intangible assets			(160	)			(81	)
Other			(48	)			12
Cash used in investing activities			(31,604	)			(12,251	)
Financing activities:
Proceeds from issuance of common stock			377				494
Excess tax benefits from equity awards			636				740
Taxes paid related to net share settlement of equity awards			(634	)			(258	)
Cash generated by financing activities			379				976
Increase in cash and cash equivalents			306				4,717
Cash and cash equivalents, end of the period		$	10,121			$	15,978
Supplemental cash flow disclosure:
Cash paid for income taxes, net		$	4,835			$	1,913

Apple Inc.
Q2 2012 Unaudited Summary Data
(Units in thousands, Revenue in millions)
			Q1 2012					Q2 2011					Q2 2012
																		Sequential Change						Year/Year Change
Operating Segments			Mac Units		Revenue			Mac Units		Revenue			Mac Units		Revenue			Mac Units			Revenue			Mac Units			Revenue
	Americas		1,612		$	17,714		1,217		$	9,323		1,214		$	13,182		- 25	%		- 26	%		0	%		41	%
	Europe		1,482			11,256		995			6,027		1,048			8,807		- 29	%		- 22	%		5	%		46	%
	Japan		184			3,550		155			1,383		158			2,645		- 14	%		- 25	%		2	%		91	%
	Asia Pacific		814			7,697		596			4,743		771			10,153		- 5	%		32	%		29	%		114	%
	Retail		1,106			6,116		797			3,191		826			4,399		- 25	%		- 28	%		4	%		38	%
Total Operating Segments			5,198		$	46,333		3,760		$	24,667		4,017		$	39,186		- 23	%		- 15	%		7	%		59	%
																		Sequential Change						Year/Year Change
Product Summary			Units		Revenue			Units		Revenue			Units		Revenue			Units			Revenue			Units			Revenue
	Mac Desktops (1)(9)		1,479		$	1,936		1,009		$	1,441		1,199		$	1,563		- 19	%		- 19	%		19	%		8	%
	Mac Portables (2)(9)		3,719			4,662		2,751			3,535		2,818			3,510		- 24	%		- 25	%		2	%		- 1	%
Subtotal Mac			5,198			6,598		3,760			4,976		4,017			5,073		- 23	%		- 23	%		7	%		2	%
	iPod (3)(9)		15,397			2,528		9,017			1,600		7,673			1,207		- 50	%		- 52	%		- 15	%		- 25	%
	Other Music Related Products and Services (4)					2,027					1,634					2,151					6	%					32	%
	iPhone and Related Products and Services (5)(9)		37,044			24,417		18,647			12,298		35,064			22,690		- 5	%		- 7	%		88	%		85	%
	iPad and Related Products and Services (6)(9)		15,434			9,153		4,694			2,836		11,798			6,590		- 24	%		- 28	%		151	%		132	%
	Peripherals and Other Hardware (7)					766					580					643					- 16	%					11	%
	Software, Service and Other Sales (8)					844					743					832					- 1	%					12	%
Total Apple					$	46,333				$	24,667				$	39,186					- 15	%					59	%
(1)	Includes revenue from iMac, Mac mini, and Mac Pro sales.
(2)	Includes revenue from MacBook, MacBook Air, and MacBook Pro sales.
(3)	Includes revenue from iPod sales.
(4)	Includes revenue from sales from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories.
(5)	Includes revenue from sales of iPhone, iPhone services, and Apple-branded and third-party iPhone accessories.
(6)	Includes revenue from sales of iPad, iPad services, and Apple-branded and third-party iPad accessories.
(7)	Includes revenue from sales of displays, networking product, and other hardware.
(8)	Includes revenue from sales of Apple-branded and third-party Mac software, and services.
(9)	Includes amortization of related revenue deferred for non-software services and embedded software upgrade rights.

Apple’s stock continued to slide on Tuesday morning as some analysts suggest AT&T’s earnings point to a possible rare miss for the Cupertino, California-based company. Wall Street expects Apple to report iPhone channel sales of 32 million units when it posts its earnings after the market closes on Tuesday, but several analysts have made last-minute adjustments to their estimates following AT&T’s earnings report on Tuesday morning.

Apple’s top iPhone carrier partner reported that it activated 4.3 million iPhone handsets last quarter, up from 3.6 million in the first quarter last year but missing many estimates, and Verizon reported last week that it activated 3.2 million iPhones. According to several firms, these activation figures point to a potential Apple miss.

“Apple’s stock has corrected just over 10% from its all-time high last week,” Jeffries & Company analysts wrote Tuesday morning in a note to investors. “We believe this has been partially due to concerns over carrier subsidies eroding and penetration rates losing steam. We disagree on both counts and provide a brief look at subsidies as well as the iPhone and iPad opportunity. AT&T’s and Verizon’s results imply cuts are required to our CQ2 Apple estimates.”

The firm continued, “AT&T activated 4.3M iPhones in Q1 (-43% Q/Q) vs. our expectation of 6M. Last week Verizon reported activating 3.2M (-24% Q/Q) vs. our expectation of 4M. iPhone share fell slightly at both (from 81% to 78% at AT&T; from 55% to 51% at Verizon). We believe this bodes poorly for Apple’s CQ2 guidance. Instead of 32M iPhone shipments in CQ2 we now believe 28M-30M is more likely (we currently estimate 32M).”

BTIG Research analyst Walter Piecyk points to a slower-than-expected upgrade rate as the culprit for a potential iPhone sales miss. “The lower than expected number of iPhone activations appears to be driven by a lower than expected upgrade rate of 7% versus our estimate of 9% and Q4 upgrade rate of 11.9% resulting in total devices sold in calendar Q1 of 7.1 million versus our estimate of 8.7 million, a 17% decline from last year,” the analyst wrote in a note on Tuesday. ”This is a significant slowdown and likely driven by the company’s new upgrade policies.”

Piecyk believes that new upgrade policies could have an even greater impact on iPhone sales in future quarters. While he thinks iPhone sales in China are likely to offset slowed sales in the U.S. to an extent, Piecyk reiterated his iPhone sales estimates of 33 million units this past quarter and 27.5 million in the third fiscal quarter.

Updated to correct BTIG’s iPhone sales estimates

4G LTE devices are apparently so hot this year, Sprint is selling LTE phones without a network to support them. Sales of 4G-equipped smartphones, tablets, portable hotspots and other devices are set to explode in 2012 as carriers continue to expand 4G coverage and roll out new networks. In a recent report, market research firm ABI Research said that 4G device sales will balloon nearly 300% to 87 million units in 2012. ABI notes that higher prices are still a barrier to 4G devices in some regions, however, and consumer confusion is an issue as well. “As evidenced by the Australian iPad 3 promotion fiasco, when iPad 3s were being promoted as being ‘LTE-ready,’ even though the modem is unable to access the Australian LTE spectrum band, the number of LTE spectrum bands will hamper initial pricing and product roll-out,” ABI analyst Philip Solis said. “Nevertheless, in addition to 61 million 4G handsets being shipped in 2012, we estimate 26 million 4G non-handset products will be shipped. In the short-term, most of that will reflect customers purchasing USB dongles for legacy laptops and netbooks, followed by customer premise equipment, or home modem, purchases.” ABI’s press release follows below.

87 Million 4G Devices to Ship in 2012

SINGAPORE – April 19, 2012

4G subscriber adoption is primed to take off in 2012 as a range of 4G-enabled mobile devices, from USB dongles, smartphones, tablets, 4G portable hotspots, and wireless broadband CPE modems, are shipping from assembly line to retail stores. “4G devices are expected to generate 87 million in unit sales in 2012, up 294% year-on-year,” states Jake Saunders, vice president of forecasting. “The lion’s share of the market is now backing LTE as service provider and vendor support has fallen away from WiMAX.” Observing the success of 3G cellular services, it is clear there is a natural evolutionary demand from end-users, both business and consumer, to jump onto the 4G data bandwagon. However, there are still some teething issues that will need to be worked through.

Some operators in Western Europe have stated that while customers do recognize 4G offers higher speeds, they are not necessarily signing up in droves, as many of them are not prepared to pay the premium for 4G handsets and 4G tariffs. “High definition,” from video streaming to richer, more interactive/immersive social networking and gaming experiences, should coax 3G customers to migrate to 4G. Furthermore, mobile device vendors are experiencing intense competitive pressure, which is expected to bring down LTE handset prices, estimated at 10 to 20 percent over the next two years.

“As evidenced by the Australian iPad 3 promotion fiasco, when iPad 3s were being promoted as being ‘LTE-ready,’ even though the modem is unable to access the Australian LTE spectrum band, the number of LTE spectrum bands will hamper initial pricing and product roll-out,” comments Philip Solis, research director, mobile devices. “Nevertheless, in addition to 61 million 4G handsets being shipped in 2012, we estimate 26 million 4G non-handset products will be shipped. In the short-term, most of that will reflect customers purchasing USB dongles for legacy laptops and netbooks, followed by customer premise equipment, or home modem, purchases.”

ABI Research’s “4G Subscriber, Device, and Networks Market Data” contains regional and selected country-level segmentation for the 4G market.

It is part of the firm’s 4G Research Service.

Microsoft and its partners have seemingly set some very lofty goals for Windows 8. Citing multiple anonymous sources at various unnamed Taiwan-based original device manufacturers, DigiTimes on Wednesday reported that Windows and Intel want top-tier vendor partners to launch an all-out assault on Apple’s iPad. The iPad’s share of the tablet market currently sits at 70% according to the report, but Microsoft and Intel want to push that figure down to 50% by the middle of next year. If earlier reports pan out, devices powered by the Windows 8 platform will begin rolling out early in the fourth quarter this year, and that gives Microsoft and its partners roughly three quarters to steal 20% of Apple’s market share. DigiTimes states that there will be 32 Windows 8 tablets available from various vendors by the end of the year.

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Following a huge week that saw Apple’s stock climb above $630 amid a fresh round of analyst upgrades, one analyst isn’t sold on the notion that smooth sailing is assured in the immediate future for the world’s most valuable company. BTIG Research analyst Walter Piecyk thinks Apple is set to report blowout earnings for the second fiscal quarter — he sees Apple earning $10.75 per share on sales of $40 billion in the quarter, versus Wall Street’s consensus of $9.81 and $36 billion — but he downgraded Apple’s stock to Neutral from Buy, noting that it’s time for investors to “take a breather.” Read on for more.

“We continue to maintain our view that Apple is the primary beneficiary of an accelerating growth trend in the global adoption of smartphones, considering global penetration of smartphones has not yet even reached 30%,” Piecyk wrote in a research note on Monday. “However, given the run up in Apple’s stock and the consensus estimates, we think now is a good time to more carefully consider how it will capitalize on the next and likely much larger leg of growth in the industry and prepare for the inevitable bumps that may occur on the way.”

The analyst believes Apple could run into some trouble starting in the third fiscal quarter that may eventually lead to a price cut on Apple’s iPhone, which currently drives much of Apple’s success due to huge margins. While numerous analysts see continued success for Apple’s highly sought-after smartphone, Piecyk believes carriers will soon grow less willing to sustain a $600 iPhone.

“Subsidies by post-paid wireless operators have fueled the growth of Apple’s $600 iPhone since its inception” Piecyk wrote. “Even in the pre-paid dominant markets of China and Europe, heavily subsidized iPhone’s are available to users willing to sign up for a contract. Wireless operators have been happy to subsidize smartphones to new and existing customers in order to provide a lift to the average monthly bill (ARPU) of their customer base, a metric which had been falling for the past three decades.”

The analyst continued, “The positive inflection point in ARPU was cheered by investors but the cost to drive that ARPU accretion is now starting to eat away at profitability and the performance of those stocks. Operators, unwilling to stall the pace of ARPU growth, offered generous upgrade policies including some that enabled a fully subsidized phone upgrade only one year in to a two year contract. We expect those policies to change as the faster upgrade rate of smartphones compared to legacy feature phones has been a costly surprise to post-paid and pre-paid operators, alike.”

BTIG sees Apple selling 33 million iPhones in the second fiscal quarter and 27.5 million in the third, when it could miss Wall Street’s earnings estimates as it did in the fourth quarter last year. “Specifically, we expect Apple’s iPhone sales to drop to 27.5 million units in Fiscal Q3 resulting in a revenue estimate that is $1 billion below consensus,” Piecyk noted.

HTC on Friday reported unaudited earnings for the first quarter, revealing an extremely rocky start to the new year. The company warned that its first quarter results would see decline as the Taiwan-based vendor prepared to launch its new flagship smartphones, and preliminary numbers are in line with HTC’s earlier forecast. Revenue of NT$67.8 billion in the first quarter is down 35% from the same period last year, and HTC posted an after-tax profit of just NT$4.7 billion, down 70% year-on-year. HTC hopes business will pick up significantly as its new flagship smartphones, the One X and One S, begin to launch in various regions abroad. In the United States, the One X will launch on AT&T this month and before the end of June on Sprint as the HTC EVO 4G LTE. The HTC One S will be released in April on T-Mobile.

Reviews of Nokia’s new Lumia 900 smartphone have been mixed. We thought the sleek handset was a breath of fresh air for Microsoft’s Windows Phone platform when we reviewed the phone earlier this week, but a number of other sites found the software to be lacking. Now, bears at two investment firms have weighed initial reactions to the Lumia 900 and determined that this smartphone likely won’t be the savior Nokia needs to gain significant ground in the United States. Read on for more.

“It’s going to be an uphill fight,” Avian Securities analyst Matthew Thornton told Bloomberg. “The Nokia brand, while I think it’s still known here, lags Apple and even Samsung. I don’t see the phone becoming a hit.”

Thornton sees Lumia 900 sales over the phones first three months of availability reaching into the hundreds of thousands rather than the millions. While AT&T’s sales targets for this smartphone are not known, the aggressive $99.99 price point is a good indication that the carrier has high hopes for the handset.

Activations of AT&T’s most popular smartphone, the iPhone 4S, reached more than 1 million units during the phone’s first week of availability.

Deutsche Bank analyst Kai Korschelt recently projected that AT&T could sell as many as 680,000 Lumia 900 smartphones per quarter. He did note that if consumers do not respond well to the device, however, the carrier may reduce its efforts and sales may be as low as 140,000 units per quarter.

“This launch will set the tone for Nokia’s recovery,” Strategy Analytics analyst Alex Spektor said to Bloomberg. “The U.S., since the rise of the iPhone, has become the most important market for mobile devices so success here is important for any vendor who wants to succeed on a global scale.”

The International Data Corporation on Wednesday announced that shipments of smart connected devices —including PCs, tablets and smartphones — reached 916 million units and surpassed $489 billion in revenue in 2011. “Whether it’s consumers looking for a phone that can tap into several robust ‘app’ ecosystems, businesses looking at deploying tablet devices into their environments, or educational institutions working to update their school’s computer labs, smart, connected, compute-capable devices are playing an increasingly important role in nearly every individual’s life,” said Bob O’Donnell, vice president of Clients and Displays at IDC. The firm estimates that worldwide shipments of smart connected devices will top 1.1 billion in 2012 and double to 1.84 billion by 2016. IDC’s numbers represent a compound annual growth rate of 15.4% over the next five years. The firm also predicts that the number of Android-powered devices running on ARM CPUs will grow from 29.4% in 2011 to a market-leading 31.1% share in 2016. Apple’s iOS-based devices, on the other hand, are estimated to grow from 14.6% share in 2011 to 17.3% in 2016. IDC’s press release can be found after the break.

Nearly 1 Billion Smart Connected Devices Shipped in 2011 with Shipments Expected to Double by 2016, According to IDC

FRAMINGHAM, Mass.–(BUSINESS WIRE)–The universe of smart connected devices, including PCs, media tablets, and smartphones, saw shipments of more than 916 million units and revenues surpassing $489 billion dollars in 2011, according to the International Data Corporation (IDC). These numbers reflect the combined total from IDC’s Worldwide Quarterly PC Tracker, Mobile Phone Tracker, and Media Tablet Tracker.

“Whether it’s consumers looking for a phone that can tap into several robust ‘app’ ecosystems, businesses looking at deploying tablet devices into their environments, or educational institutions working to update their school’s computer labs, smart, connected, compute-capable devices are playing an increasingly important role in nearly every individual’s life,” said Bob O’Donnell, vice president, Clients and Displays at IDC.

Looking ahead, unit shipments for smart connected devices should top 1.1 billion worldwide in 2012. By 2016, IDC predicts shipments will reach 1.84 billion units, more than double the 2011 figure, as consumers and business of all shapes and sizes around the world are showing a nearly insatiable appetite for smart connected devices. This works out to a compound annual growth rate (CAGR) of 15.4% for the five-year forecast period.

A graphic illustrating the size and composition of the worldwide smart connected device market for the 2010-2016 forecast period is available at IDC.com. Instructions to embed the graphic into online news articles and social media can be found by viewing this press release on IDC.com.

In terms of platforms, IDC expects a relatively dramatic shift between 2011 and 2016, with the once-dominant Windows on x86 platform, consisting of PCs running the Windows operating system on any x86-compatible CPU, slipping from a leading 35.9% share in 2011 down to 25.1% in 2016. The number of Android-based devices running on ARM CPUs, on the other hand, will grow modestly from 29.4% share in 2011 to a market-leading 31.1% share in 2016. Meanwhile, iOS-based devices will grow from 14.6% share in 2011 to 17.3% in 2016.

“Android’s growth is tied directly to the propagation of lower-priced devices,” said Tom Mainelli, research director, Mobile Connected Devices. “So, while we expect dozens of hardware vendors to own some share in the Android market, many will find profitability difficult to sustain. Similarly, we expect a large percentage of application developers to continue to focus their efforts on iOS, despite the platform’s smaller overall market share, because iOS end users have proven more willing to pay for high-quality apps.”

Research conducted by IDC suggests that many individuals own and regularly use multiple smart connected devices. “We are in the multi-device age,” continued O’Donnell, “and we believe the number of people who use multiple devices will only continue to increase. The trick, moving forward, will be to integrate all these devices into a unified whole through use of personal cloud-type applications and services. That’s the real challenge of what we have often called the ‘PC Plus’ era.”

“Smartphone growth will be driven by Asia/Pacific countries, especially China, where mobile operators are subsidizing the purchase of 3G smartphones, thus increasing the total addressable market. In many if not all instances, the smartphone will be the primary connection to the Internet,” said Will Stofega, program director, Mobile Phone Technologies and Trends. “In countries where devices are not subsidized by the mobile operators, competitive and component-based pricing will help drive volume.”

Apple has reportedly scheduled mass production of its new 15-inch MacBook Pro to begin in April, and production of a new 13.3-inch model will ramp up in June, according to a report from Digitimes. The site’s unnamed sources from Apple’s supply chain said that the Cupertino-based company has ordered a far greater number of 13.3-inch models than 15-inch laptops, and it is anticipating higher demand for the smaller device. The source also indicated that the 15-inch model’s monthly production capacity is expected to start with between 100,000 and 150,000 units and rise gradually. The Taiwanese publication has previously reported that Apple will launch an ultra-thin 15-inch MacBook laptop with Air-like features as early as the second quarter of 2012.

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