SAN JOSE, Calif. -- The iPad-alikes are coming! The iPad-alikes are coming!
Bar the doors. A flood of brutish tablets are on the way, many of them misbegotten and most will be veeeery user unfriendly.
Apple's quarterly results announced today included a clarion call to hoards of product imitators in and beyond Taipei. In its first 90 days of production, Apple shipped 3.2 million iPads for revenue of about $2.17 billion--and the product isn't even available in most geographies yet.
"The iPad doesn’t seem to be following the normal early-adopter curve," said Apple chief operating officer Tim Cook with his characteristic deadpan drawl. "Our gut tells us this market is really big," he added.
Market watchers are sharpening their pencils to tell us exactly how big "really big" is. Meanwhile production lines are already ramping up for every slate concept you can rush to manufacturing before you can say verification. Indeed, Computex was already abuzz with tablets days after the iPad launch.
Those of you with calculators will have already discerned Apple's dirty little secret: the average selling price for the iPad is about $640, making it slim-margin territory for the King of Cupertino. Indeed, Apple saw gross margins slide from 41 to 39 percent in the quarter and predicted they may slip another point or two next quarter as it tries to grab the lion's share of what it thinks is a unique opportunity to be the first to define yet another category—the consumer tablet.
That roar you hear is the laughter from half the business community in Taiwan at the thought that a 30+ percent gross margin might be construed as slim. But not so fast! Those double-digit salary increases starting to make the rounds at China's sweat—er—assembly shops may put Asia Inc. a little closer to being on par with Apple.
Meanwhile Apple is giving vertical integration a good name again. On one end, they quietly continue to beef up their engineering ranks with microprocessor gurus such as Mark McDermott. On the other end, they hope to open 24 new retail stores in the next quarter, adding to the 293 shops that attracted 60.5 million people and rang up average sales of $9 million in the last period.
What's next? Perhaps they will launch their own magazine to review their own products. They could call it Steve Magazine and have Jobs on the cover every month. Move over, Oprah. (One headline you won't see: The 10 worst antenna designs.)
Truly Apple is firing on all cylinders. Despite the iPhone 4 antenna problem, the company's smartphone business is growing at twice the industry rate. Forget Antennagate, it's Applemania.
And even though the iPod business is now declining eight percent per quarter in unit sales, it is still up four percent per quarter in revenues thanks to a shift to the higher price iPod Touch models. Even a decline becomes a success.
Nothing lasts forever. But it will take more than an antenna malfunction or a few million measly bumpers to sidetrack this train. Get outa the way, here comes Apple and an unholy heard of imitators. Hang on to your notebooks!