NEW YORK (TheStreet) -- Apple (AAPL) chief Steve Jobs, in a rare earnings call appearance, discredited rivals Google (GOOG) and Research In Motion (RIMM) and condemned the upcoming crop of 7-inch tablets.
The Jobs' tirade served as a dramatic sideshow to a mixed financial performance that included blowout profits on stronger-than-expected iPhone sales and surprisingly thin margins on iPad sales.
Shares of the Cupertino, Calif. tech shop fell as much as 7% immediately after the release of the earnings report Monday, leading the tech sector lower Tuesday. Joining the selloff was IBM (IBM), which beat estimates but fell after the bell. And Microsoft (MSFT) also fell 2% early Tuesday after announcing that software chief Ray Ozzie is leaving the company.
Apple says it sold 14.1 million iPhones, 3.89 million Macs and 4.19 million iPads in the quarter. That compares with the Street targets that had Apple selling 11.8 million iPhones, 3.76 million Macs and about 4.8 million iPads.>>Riding Apple's Coattails The greatest concern among analysts was the gross margin, which narrowed to 36.9% from 41.8% in the year-ago period, and was thinner than the 38% analysts were looking for. Apple blamed the high cost of new products like a new iPod touch -- and presumably the iPad -- for the drag on margin. Looking ahead, Apple says it expects to book $23 billion in revenue in the December quarter. Analysts were looking for $22.22 billion in sales for the period. But the fireworks came midway through the earnings conference call when Jobs joined the line to hail the company's first $20 billion revenue quarter. He went on and bashed the competition in an oddly head-on fashion not commonly heard from CEOs. Clearly perturbed by the sudden rise of Google's Android phones, which outsold iPhones in the second quarter, Jobs took a few jabs at the challengers. He started by boasting that Apple's iPhone sales surpassed RIM's BlackBerries, adding: "I don't see them catching up with us in the foreseeable future." Jobs went on to critique the Android movement effectively, calling it messy and rife with too many challenges for developers and too many choices for users. "We think Android is very, very fragmented and becoming more fragmented by the day. And as you know, Apple strives for the integrated model so that the user isn't forced to be the systems integrator," said Jobs, according to a Macworld transcript. Jobs then went on to discredit the "avalanche" of tablets set to invade the market. The focus of his criticism was the inferiority of the 7-inch screen, an interesting point given that Apple had plans to introduce its own 7-inch version of the iPad.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV