Steve Jobs Defends iPad to Investors, Analysts
Apple CEO denigrates competition on earnings call following device's lower-than-expected sales.
Steve Jobs made a rare appearance on an earnings call to defend the iPad and denigrate the competition. But when it was all said and done, investors were selling Apple's stock big-time.
The CEO told analysts Monday that he decided to join the conference call to celebrate the first time Apple's sales exceeded $20 billion in a single quarter. The company posted $20.34 billion during its fiscal fourth quarter, up 67% compared with the same frame a year ago. Net income surged 70% to $4.31 billion.
Despite the lofty numbers that bested the predictions of analysts, Apple shares dropped 6% in after-hours trading after going 1% higher during the regular session to $318. That closing price gave Apple a market cap of $290.5 billion, larger than the combined value of Time Warner, Disney, Viacom, CBS, Sony, Comcast and News Corp.
But though investors and analysts were impressed that Apple sold 14.1 million iPhones and 3.9 million Mac computers, they were disappointed it sold only 9.1 million iPods and 4.2 million iPads, about 600,000 fewer than what analysts had predicted.
With Dell, Samsung, Research in Motion and Hewlett-Packard prepping tablet computers that will compete with the iPad, Jobs went on the offensive.
"Our potential competitors are having a tough time coming close to iPad's pricing, even with their far smaller, far less expensive screens," he said.
The iPad's 10-inch screen is three inches larger than tablets from some of Apple's competitors.
Jobs joked that the smaller tablets should come with sandpaper "so that the user can sand down their fingers to around a quarter of their present size."
He said there are now 35,000 apps for the iPad, and competitors have zero. And he boasted that Apple is moving more iPads nowadays than Mac computers.
"The more time that passes, the more I am convinced that we've got a tiger by the tail here," he said.
On Monday's call, Jobs also was asked about his "hobby," the Apple TV. Jobs said 250,000 units have sold since the device was launched four years ago.
"We're thrilled with that," Jobs said.