Apple Slams Tablet Rivals as its Q1 Soars

As the market continued to worry about the impact of CEO Steve Jobs’ newly announced medical leave, Apple Inc. (Nasdaq: AAPL) blasted through earnings expectations late Tuesday, once again showing its strength in the mobile field. (See Apple Posts Q1 and Jobs Takes Medical Leave From Apple.)

And the company made the most of its earnings conference-call opportunity to deride its rivals in the increasingly hot tablet market.

The numbers
Apple made a profit of US$6 billion in its fiscal first quarter, a 78 percent improvement on a year ago, and generated revenues of $26.7 billion. Apple is predicting it will report revenues of $22 billion for its fiscal second quarter.

The company sold 16.24 million iPhones during the three months to December 25, a new record for the company, while iPad sales hit 7.33 million. The company also sold 4.3 million Macs.

Talking tablets
Apple COO Tim Cook, who is handling the day-to-day running of the company during Jobs’ absence, radiated confidence on the conference call about future sales of its newest product, the iPad, dismissing the other tablets currently on the market. "If you look at what's shipping today, there's not much out there," he said.

Cook separated the competition into "big, heavy and expensive" tablets with "weak battery life," and the smaller Android-based tablets, which often sport a 7-inch screen. "They’re kind of a scaled-up smart phone, which is a bizarre product in our view," Cook said, adding that even Google (Nasdaq: GOOG) had said Android wasn't a suitable operating system for tablets.

Apple, he concluded, will monitor the tablet market, but is happy with its head start on its rivals. "We'll enter into a fight with anyone [on tablets]," Cook said.

Two-carrier strategy
Apple executives are clearly looking forward to the boost in sales that the iPhone's launch on Verizon Wireless in February will deliver. Cook, however, didn't say anything about launches with any other operators in the U.S. (See Verizon Finally Gets the iPhone 4 .)

Instead he noted that Apple has a "multi-year, non-exclusive deal" with AT&T Inc. (NYSE: T) and is working a two-carrier strategy in the country.

The future
Jobs' announcement Monday had threatened to overshadow Apple's earnings report. This is his third leave of absence since June 2004, and there is no word yet on when he will return to the helm.

Despite this uncertainty, Cook focused on how much more Apple could grow in the coming years. Aside from the iPad's success, Cook noted that Apple still has room to increase its market share in both the PC and mobile phone markets.

— Dan Jones, Site Editor, Light Reading Mobile

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