The weak spot on Apple’s September quarterly earnings report was the iPad sales number: 14 million shipments, down from 17 million in the June quarter.

That’s almost three times as many as the number of Macs Apple shipped during the quarter, but it reflects only 26% growth from last year and 18% fewer iPads than the June quarter. Hardly a growth rate to be ecstatic about when the bold prediction is that the iPad/tablet industry will grow to zoom past the PC industry.

Tim Cook’s comments on Apple’s earnings call should soften the blow a little.

He said:

  • The drop in iPad sales (to people) from the June quarter wasn’t as big as the reported drop in iPad shipments (to the sales channel). This is because iPad channel inventory had grown by 1.2 million units in the June quarter, so the September quarter didn’t have that same boost.
  • This also affected year-over-year shipment growth, as the year-ago quarter was also uncharacteristically strong. It, too, included channel inventory build.
  • So: iPad sales to people, or “sell-through,” actually increased 44% year-over-year, vs. the 26% in reported “sell-in,” or shipments.
  • 14 million shipments actually “exceeded” what Apple had anticipated. Apple expected a seasonal decline in September quarter iPad shipments vs. June quarter iPad shipments. OK.
  • One reason Apple expected a sequential, seasonal decline: Because K-12 sales taper off after the June quarter, while higher-ed sales pick up in the September quarter. And higher-ed customers are still buying notebook PCs for the most part. (Mac laptop sales grew 9% year-over-year and grew 31% from the June quarter.) I don’t know how large edu-related sales are for either the iPad or Mac businesses, but this sounds plausible.
  • People also delayed iPad purchases because of new product rumors.

Fair enough. One quarter isn’t a reason to get worried about the iPad, anyway.

But two big questions remain:

  1. How big is the iPad market really going to get? Is this something everyone’s going to have, or a luxury gadget?
  2. How will the iPad mini affect the overall iPad business? Especially if there are severe shortages during the holidays.

See you again to go over this in January.