Apple, IPads, IPhones, IPods, Foxconn Apple still can't keep up with iPad demand

SAN JOSE, Calif. – Fifteen months after the iPad was launched, Apple still can't keep up with demand for the popular tablet.

"This is a good problem--demand is fantastic," said Tim Cook, Apple's chief operating officer in a conference call announcing record quarterly revenues and profits.

But it's still a problem, one of a handful Apple would not talk about in detail. The company also alluded to "a future product transition" which is one reason why it is forecasting a decline in sales for its fall quarter.

The good news is Apple sold 9.25 million iPads in the last three months, double the number of the previous quarter and three times as many as in the same quarter last year. The bad news is it could have sold more if it could have made them.

"In the first weeks of July supply improved so that some SKUs in some countries are now in supply/demand balance," said Cook, refusing to forecast when the company would be able to meet global demand. "We are working very hard to get as many units to customers as we can," he said.

Cook also dodged a question about whether the company was diversifying its base of manufacturing partners beyond Foxconn that operates city-sized factories for Apple in China. Supply chain management is "part of our secret sauce, so I don’t want to share too much about it," he said.

An explosion at a Foxconn plant in China was expected to impact iPad manufacturing.

Tablets are cannibalizing notebook sales, but Cook did not quantify the effect. "We believe some customers chose an iPad instead of a Mac, but even more chose an iPad over a Windows PC and there's more Windows PCs to cannibalize than Macs," he said.

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