One in four U.S. iPad owners tell NPD it’s their first Apple product

Apple Inc.

FORTUNE — It used to be the iPod that got Americans started down the road to dependency. Now, according to a new NPD survey, their first Apple (AAPL) product is more likely to be an iPhone or, increasingly, an iPad.

To quote the NPD press release:

“While over 70 percent of long-standing Apple owners began their relationship with the brand by way of the iPod, this number declines to just 57 percent among those entering the Apple franchise in the past two years.  Newcomers to the brand increasingly turn to the iPhone or iPad as their first Apple device, which combined account for one-third of first-time Apple purchases since 2010.”

That makes sense. iPod sales slowed to 7.7 million units last quarter. In the same period, Apple sold 35 million iPhones and nearly 12 million iPads, up over 150% year over year.

“iPad sales are growing much faster than any other Apple product has this soon after launch,” says the NPD’s Ben Arnold. “In fact, one-in-five Apple owner households has one— nearly equivalent to the number that own an Apple computer.”

According to NPD, 33% of U.S. homes, (37 million households) own Apple products.

You can think of the iPad as the new Apple gateway drug, although the company prefers to talk about its “halo effect.”

Filed under: Apple 2.0

Fortune’s curated selection of tech stories from the last 24 hours. Sign up to get the round-up delivered to you each and every day.

* Google (GOOG) is seeking partnerships with automakers to eventually bring its self-driving car technology to real-world drivers. Though, the company still needs to conduct “millions of miles” of testing, and it may take another decade to bring to market. (The Wall Street Journal)

* One good thing to come out of the Oracle (ORCL) vs. Google trial? A wealth of new information about Android, including initial revenue expectations and designs for the first “Google Phone“ dating all the way back from 2006. (The Verge)

* Business software maker SAP (SAP) announced quarterly results yesterday, reporting its ninth consecutive quarter of double-digit growth in sales — 3.35 billion euros ($4.43 billion) in total. (Fortune)

* Capitalizing on 250% year-over-year growth in iPad usage, LinkedIn unveiled a slick new app for the tablet. The new app features, among other things, a section called “All Updates,” where a dashboard displays appointments, news updates, the weather, what coworkers are sharing, as well as alerts of connections with new jobs. (LinkedIn)

* Why Amazon’s (AMZN) potential ability to lower e-book prices to $9.99 may be good news — for now. The move may occur largely thanks to the Justice Department’s suit against Apple (AAPL) and five major book publishers for allegedly fixing book prices. (CNNMoney)

* Sprint (S) intends to keep offering Unlimited data plans, even if the next iPhone ends up supporting faster fourth-generation LTE network speeds. (CNET)

* Microsoft (MSFT) plans to introduce a new music service codenamed “Woodstock” at this year’s E3 convention. According to The Verge, Woodstock may operate similarly to the popular streaming service Spotify, will feature deep Facebook integration, and won’t require additional plug-ins to work. (The Verge)

* Hot mobile payments start-up Square now processes $5 billion worth of credit card transactions a year, a %25 increase from the year before. (Bloomberg)

* Why your online Klout score may really matter, particularly during some job interviews. (Wired)

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Filed under: Today in Tech

SAP’s latest earnings report shows some progress in the software giant’s quest to remake itself. Now it wants to become the fastest-growing database company in the world.

Bill McDermott, SAP co- CEO

FORTUNE — SAP’s efforts to become more nimble and innovative appear to be working—to some extent. Revenue from new products like an in-memory database technology called HANA and cloud-based software from recently-acquired SuccessFactors is growing, but it still makes up a small fraction of the company’s overall sales. And SAP is still far from reaching some of the ambitious milestones its co-CEOs have set.

The world’s largest business software maker announced quarterly results on Wednesday, reporting its ninth consecutive quarter of double-digit growth in software and software-related revenue. HANA brought in 28 million euros, while cloud subscription and support sales came in at 29 million euros (the company’s overall revenue, meanwhile, came in at 3.35 billion euros). But SAP says it’s serious about becoming a major cloud player. And the company is confident that it’s on track to double last year’s HANA sales to at least 320 million euros in 2012.

“We intend to be the fastest-growing database company in the world,” Bill McDermott, SAP co-CEO, said in a call with Fortune Wednesday morning. To accelerate the adoption of HANA, SAP recently launched a fund to help customers migrate from their existing databases to HANA. The company says it has already started doling out some of the money it has put aside for customers interested in making the switch.

“Most of them are not that happy with their incumbent [database provider],” McDermott said.

Oracle (ORCL), of course, is the number one database provider. And it’s not going down without a fight. On a recent call with investors, the company downplayed the threat from HANA. (On Friday Oracle is planning a webcast presentation to investors and press on Exalytics, its HANA competitor).

MORE: Oracle earnings: Some growth, plenty of SAP-bashing

In reality, SAP (SAP) does have a long way to go to prove it can transform itself into major player in database technology, cloud-based software, mobility and analytics–all fast-growing sectors of the enterprise market. But it has put some of the right pieces in place—the CEO of recently-acquired SuccessFactors, Lars Dalgaard, has joined the company’s executive board and is now tasked with running all of its cloud efforts. Cloud revenue is small but growing at a much faster rate than traditional software sales: SAP reported that the SuccessFactors business grew bookings by 69% compared to the first quarter of 2011. And the company is pouring marketing muscle and manpower into HANA and other innovative efforts like mobile apps.

Next month, at a conference in Florida, SAP is expected to unveil more details on its cloud strategy. It’s sure to talk up HANA, mobile and analytics as well. But what about its core business, enterprise resource planning software? It’s long-overdue for a serious overhaul on its less-exciting core product, which accounts for the bulk of current revenue. Of course, redesigning complex software isn’t easy and takes time. But it’s a necessary step for SAP to truly become the innovation leader in the enterprise.

Filed under: Big Tech

Visualizing Apple’s growth in earnings, revenue and margins

Source: Asymco Twitpic

FORTUNE — Asymco‘s Horace Dediu has posted a couple of charts that show better than I could tell the significance of Apple’s (AAPL) quarterly results.

The first graphs the rise in Apple’s growth- and operating-margin percentages. Dediu’s two-word TwitPic comment: “Simply breathtaking.”

Below, an up-to-date version of the chart with which Dediu tracks Apple’s quarterly net sales and earnings growth rates.

Click here to read his commentary.

Source: Asymco.com

Filed under: Apple 2.0

Rappers have long collaborated for artistic and aesthetic reasons. But over the past few years, a pattern of cross-pollination has become increasingly important to the bottom line.

By Daniel Roberts, reporter

FORTUNE — One word appears repeatedly among the top-rated rap songs on iTunes and Spotify. It is not a piece of in-vogue argot or even a masked expletive; it’s the word “featuring.” Of the top 20 singles on Billboard’s R&B/Hip-Hop chart, 10 have at least one guest vocalist. Two feature more than one guest, many of them with familiar names like Drake, Chris Brown, Rihanna, Young Jeezy and Tyga. “The biggest artist in the world right now is Featuring. That guy is on every record,” jokes Peter Paterno, Dr. Dre’s attorney.

Hip-hop and rap have long relied on collaboration, sampling and remixing. But the guest appearance has gone from simply a part of the artistic fabric of rap to a core feature of its commercial success. “Rap artists have become more entrepreneurial as a necessity, and they’ve realized a big part of them breaking is to get others on their songs,” says Warner Music (TWX) co-CEO Todd Moscowitz, previously general manager at Def Jam Records. “It’s not just about singles for radio, it’s about ubiquity. They gain fans from each artist they do a record with.”

Exhibit A: Kanye West’s album My Beautiful Dark Twisted Fantasy, which was released in November 2010. It contained an astounding 22 guest vocalists including Nicki Minaj, Swizz Beatz, as well as Wu-Tang Clan members RZA and Raekwon. Bon Iver, Pusha T, and Rick Ross each appear on multiple tracks. One song, “All of the Lights,” has vocals from John Legend, The-Dream, Tony Williams, Ryan Leslie, Charlie Wilson, Elly Jackson, Alicia Keys, Fergie, Kid Cudi, Rihanna and Elton John. And in the weeks leading up to the album’s official release, West posted a new single every week online, calling them G.O.O.D. Friday tracks after his label. Each featured guest vocalists such as Justin Bieber and Lupe Fiasco.

MORE: Leigh Steinberg: They showed him the money

The economics have shifted along with the trend. Artists no longer necessarily get paid simply for appearing on a major release. “It’s almost always just a trade now, where one artist will do a verse on someone’s album for a guest verse on their own record,” says Moscowitz. The prize is exposure, plus gains reaped down the line from new fans and opportunities like concerts or merchandising deals. When they are paid, compensation is often a flat fee, with bigger stars pulling as much as $100,000 per track. Advances against future royalties or copyright credits are also common.

Many agreements — especially ones that have no financial component — are made on a whim. Ryan Leslie, a producer and R&B singer, says there are so few big studios left in New York that artists will often find themselves in close proximity. “There’s a studio video of me making a record for Fabolous, and Keri Hilson just happened to be in an adjacent room recording, so it turned into a single,” he says. The same thing happened with the G.O.O.D. Friday song “Christian Dior Denim Flow.” Leslie explains, “It just happened that the night I came by to see ‘Ye, everybody was in the studio. He looked around and said, ‘Man, we’ve got John Legend, Kid Cudi, Lloyd Banks, Ryan… We gotta do something.’ I went over to the keys, the beat got laid, Banks and Cudi did their verses. It was a very open and collaborative vibe.” When that happens, he adds, “I don’t worry about the back end.”

That can lead to problems, however. Tony Girakhoo, known as Tony G. and a scout for 50 Cent’s label G-Unit, notes that the people on that “back end” usually do worry. “An artist like Nicki Minaj might be hanging out with another artist in the studio and say ‘Hey, I’ll jump on this song,’ so they cut a record,” he says. “But then management won’t clear it. They’ll say, ‘Listen, we’re putting out this or these two singles first, and we have all these marketing dollars behind it, we don’t want to confuse the public with a feature right now.’” Thus there are a number of great collaborations that are never heard.

MORE: MLB.com is gearing up for next season

That typically leads artists to leak songs onto the Internet. “If it’s four marquee names and the song gets nixed by the label,” Tony G. says, “often the artist will say ‘I don’t want to deal with this, it’s not worth the headache, let’s just leak it as a promo and move on.’” That doesn’t necessarily mean the collaboration was a waste. “Unfortunately, says rap veteran Busta Rhymes, “the attention span is not as long as it used to be, thanks to the Internet. So you have to keep feeding the streets with your music.” Tony G. concurs, “You’re not just an artist anymore, you’re a brand. You have to tie everything in: your social media, your whole crew, your features with other artists.”

A decade ago, labels would make serious investments to get a verse from one big name on their client’s single, especially when they thought it could become a hot radio track. But radio is no longer the goal, and often neither is a star guest. Having a number of fresh, young artists on a track, even if they are not well-known, can be the key to making a song go viral. Established artists like Jay-Z and Kanye West benefit from working with young rappers by staying relevant and expanding their brands. Younger artists, in turn, get more exposure. J. Cole, Kid Cudi, Wale and Big Sean made names for themselves by making cameos on tracks with an established mentor.

One element the trend has displaced is the old-school rap group. Increasingly, artists have allegiance to their label but continue to function chiefly as individuals. There are exceptions, but for the most part, the days of collective groups like Run DMC, De La Soul, or NWA appear to be fading. That isn’t an entirely welcome phenomenon. Paterno believes that with the move away from groups, rap has lost something important: “People like Wu-Tang or NWA, they would sell without hits. They were a lifestyle. They mattered to people. I don’t think most artists today matter to anybody as soon as they stop having hits.”

MORE: With The Verge, SB Nation looks beyond just gadgets

Do artists worry about overexposure? Stalley, a 25-year-old from Ohio who signed with Rick Ross’s Maybach Music label last year, says he is cautious. “I don’t jump on records with people just because they’re hot right now. I want people to know my brand, and my music, and what I stand for, before I get to hoppin’ on everybody’s track.” Busta doesn’t see the same risk. For him, it’s simple: “You can put out ten thousand features. If they’re all good, then you’re good.”

Of course, only time can tell whether singles heavy with eight different vocalists are a permanent trend. “There ain’t too many more 10-year veterans still poppin’ in this game we call hip-hop and rap music,” adds Busta Rhymes. “So, you know, after five albums, let’s see where some of these hot dudes are. In five years we can revisit this, and we’ll know who really stuck around. I for one will definitely be here still busting ass.” And this from one of the most avid collaborators in the business.

Filed under: Contributors, Uncategorized

Independent analysts take the top 8 spots in our quarterly earnings smackdown

Click to enlarge.

FORTUNE — Neither side scored a clear victory this time around. The professional analysts as a group were far too cautious. And our expanded cadre of independents showed signs of irrational exuberance.

But the list at right, which ranks 57 Apple (AAPL) analysts by the accuracy of their fiscal Q2 2012 revenue and earnings estimates, shows that the independents have once again bested the pros — their 14th win in 15 quarters.

The top eight spots were taken by indies, including four of the six “best analysts” whose estimates we used as a benchmark in the weeks leading up to Tuesday’s earnings report.

The top spot goes, once again, to Daniel (“Deagol”) Tello, a Venezuelan blogger who has been posting earnings estimates since 2005. You can read his occasional analyses here.

Special mention goes to Alexis Cabot, an American expat living in Rome, who came in first in the ranking that includes all six categories (revenue, EPS, unit sales and gross margin). And to Chuck Jones, a former buy-side tech analyst who has been doing independent analysis on Apple for six months and came in third in his first outing.

Kudos also to Pacific Crest’s Andy Hargreaves, BCG’s Colin Gillis, Merrill Lynch’s Scott Craig and J.P Morgan’s Mark Moskowitz who all managed to make it into the top 15 despite institutional pressures not to stray too far from the Street’s consensus.

Last place went to Gabriel Dubois, an independent from the newly formed Braeburn Group who like many of his peers this quarter let his enthusiasm get the better of him, overestimating iPhone sales by nearly 9 million units and revenue by nearly $8 billion.

Otherwise the bottom of the list was populated by pros who seem to have missed those photographs of Chinese iPhone buyers mobbing the Beijing Apple Store. How else could Deutsche Bank’s Chris Whitmore, ISI’s Brian Marshall and Morgan Stanley’s Katy Huberty have submitted iPhone sales estimates of 26, 26 and 30 million units, respectively?

For the record, here’s how our six “best analysts” — the top performers over the past five quarters — did as a group:

Best estimates in green.

Clearly the key to correctly predicting Apple’s bottom line was getting the iPhone number right.

Below the fold: Our annotated master spreadsheet, with the best estimates highlighted in bright green, the second and third best in light green, the worst in red and the second and third worst in pink.

Click to enlarge.

Filed under: Apple 2.0

Unbridled enthusiasm across the board

Note pre-market price. Source: Yahoo Finance

FORTUNE — With no apologies for having underestimated Apple’s (AAPL) earnings in the walk-up to Tuesday’s results (see here), the Street rejoiced in another record quarter.

Topeka’s Brian White:  #1 in Consumers’ Hearts, Apple Fever Rocks On. “Last night, Apple’s performance once again demonstrated how quickly Apple fever is spreading around the world and this trend continues to drive meaningful upside in the Company’s financial results. We believe the negative vibes that have held back the stock over the past couple of weeks will now be replaced with the fear of missing the next leg up.” Raises price target to $1,111.  

Goldman Sachs’ Bill Shope:  Surprising upside likely to reignite the rally. “The sharp upside in iPhones and a favorable commodity cost environment also allowed gross margins to come in at a record 47.4%, versus our estimate of 43.5%. Operating margins of 39.3% also represented a new record for the company… Out of all the good news in the quarter, we believe Apple’s margin upside has the most important long-term implications for the story. While these margins should come down in quarters where iPhone mix is less substantial, the results suggest that annual margins can sustainably be much higher than investors previously appreciated. This substantially increases long-term earnings and cash flow generation potential. Raising price target to $850.

Pacific Crest’s Andy Hargreaves: iOS Growth Outlook Remains Solid. ”Apple sold 35.1 million iPhones in FQ2 (March), which was above our estimate of 34.1 million and the consensus estimate of 30.5 million. This was offset by iPad unit sales of 11.8 million versus our estimate of 13.8 million and a lower iPad average selling price (ASP), which drove revenue to $39.19 billion versus our estimate of $41.09 billion. How- ever, higher-than-consensus iPhone unit sales drove FQ2 revenue above the consensus estimate of $36.7 billion.” Price target: $630. 

ISI’s Brian Marshall: Let the Asymmetric Alpha Generation Resume. “2 Perfect Quarters in a Row? When AAPL beat its revenue guidance by ~25% and EPS guidance by ~50% last quarter, we called it the “perfect” quarter. AAPL managed to again deliver huge upside in the Mar-12 quarter.” Raising price target to $750.

J.P. Morgan’s Mark Moskowitz: Those Are Really Big Numbers; Customer Affinity for Apple Devices Intensifies. ”Apple continues to defy the law of large numbers with ongoing momentum across all of its major product lines. After setting all-time revenue and EPS records in the seasonally strong Dec-Q, Apple followed that up with its second best quarter ever and records for a Mar-Q. The company’s results are a testament to Apple’s optimization of the end user experience, in our view.” Price target: $715.

Canaacord Genuity’s T. Michael Walkley: Strong Quarter. “Apple generated an astonishing $14B in cash from operations during the quarter and ended the March quarter with $110.2B in cash and cash equivalents, representing a remarkable $117 in cash per share. Based on the closing price of $560 per share, Apple is trading at roughly 8x our updated F2013 estimate after backing out the $117 in cash per share. With Apple returning cash to shareholders through its dividend and buyback programs starting later this year, we believe Apple remains a compelling investment.” Raising price target to $775.

Morgan Stanley’s Katy Huberty: Buy Ahead of Product Cycles/China Catalysts. ”R&D expense increased 11% Q/Q, 7 pts above normal seasonal trends indicating increased investments in new products. The last periods that Apple posted R&D growth this much above normal seasonality was two years prior to iPad introduction and 18 months prior to iPhone introduction.” Price target: $720.

Morningstar’s Michael Holt:  Surging iPhone Sales Propel Apple to Another Stellar Quarter. “The clear standout metric, however, was Apple’s gross margin of 47.4%, up 600 basis points year over year and 270 basis points sequentially. The ability to expand the gross margin and deliver massive unit shipment growth signals that Apple is having no trouble moving premium-priced units.” Fair value estimate: $670 per share.

Citi’s Richard Gardner: Yet Another iPhone Blow-Out. ”While we continue to see potential for a merely in-line quarter at some point this year ahead of the iPhone 5 transition, valuation is not demanding and we would be aggressive buyers on any potential weakness.” Raising price target to $720.

Argus’ Jim Kelleher: Without a net. “For the first time in the past year heading into the Apple release, the usual buoyant investor anticipation was leavened with dread: if Apple flopped, its decline would crush not just the stock, but the technology sector and even the entire market. Apple, under Tim Cook, is showing that the company is as vigorous as ever, while becoming ever more global.” Raising price target to $670.

Sterne Agee’s Shaw Wu: Conservative Guidance. “For its outlook, AAPL reverted back to its vintage conservative style. For the June quarter, the company is looking for $34 billion in revenue and $8.68 in EPS vs. consensus at $37.4 billion and $9.93 in EPS. While we found this conservatism surprising in light of China Telecom recently launching in March as a new carrier, we believe AAPL is being prudent in setting realistic expectations. In addition, we believe it is smart to reflect a potential pause and inventory drawdown ahead of the next-generation iPhone 5 launch likely in the September-October timeframe.” Raising price target to $780.

Deutsche Bank’s Chris Whitmore: China and iPhone drives upside. “Although iPhone unit shipments were very robust in the March Q (35M vs. Street at ~31M), we note the 2.6M channel inventory unit build, compressed global launch schedule (now available in 100 countries), dearth of large immediate, new carrier additions and the forthcoming iPhone 5 transition (October) will likely dampen iPhone demand over the next couple of Qs.” Raising price target to $650.

BMO’s Keith Bachman. Asia Rising. “Asia Pacific revenue increased 32% q/q, compared with a decline of at least 22% q/q for all other geographies and a decline of 15% q/q for total revenue. Consistent with our past comments, we believe growth was driven by China, due in part to the iPhone 4S launch at China Unicom in January and China Telecom in March. Greater China revenue increased about 75% q/q to $7.9 billion in the March quarter. In other words, we estimate Greater China accounts for 78% of total Asia Pacific revenue, compared with around 58% in the December quarter.” Raising price target to $675.

Baird’s William Power: What iPhone concerns? “Following recent concerns regarding subsidies, the company noted the iPhone generally has a lower churn profile, is more data efficient than the average smartphone, and can be a useful tool for carriers in encouraging non-smartphone users to upgrade.” Raising price target to $740.

FBN’s Shelby Setrafi. iPhone sales, growth in China impress. “AAPL had another blowout quarter, with revenue and EPS way above expectations. Although the beat was less when adjusted for changes in iPhone channel inventory, AAPL is still executing very well.” Raising price target to $800. 

CLSA’s Avi Silver:  Another big gross margin beat: will it continue? “Apple is enjoying unprecedented pricing power, a highly favorable component cost environment (NAND and DRAM in particular), and strong operating leverage from higher revenue. The lack of material change to its form factor has also contributed to strong iPhone gross margin, which we expect to continue to a large degree in the Jun-Q. However, we expect iPhone gross margin to fall in the Sep-Q with lower volume and heavier promotions and in the Dec-Q based on its new form factor and higher-end components.” Raising price target to $770. 

Auriga’s Kevin Dede: More of the World’s Phones Go Smart. “Although both Verizon and AT&T saw significant quarterly declines in iPhone sales in the March (2Q12) quarter, Apple’s March report last night clearly signaled that international markets and distribution timing deserve greater consideration.” Price target: $700.

RBC’s Amit Daryanani. International Performance Picking Up Steam. “Apple reported significant upside to Mar-qtr estimates, driven by robust strength in international iPhone sales coupled with an exceptionally successful ramp of iPad 3. Gross margins of 47.4% were almost 500bps ahead of expectations, driven by better mix (more iPhones) coupled with commodity tailwinds.” Raises price target to $700. 

Janney’s Bill Choi: Blowout Results from China. “iPad unit sales were 11.8mn, in line with our estimate, but supply was constrained and channel inventory was down by 300k units to 2mn. As we previewed, Mac results were weaker in the quarter and total 4.0mn units, below our 4.5mn estimate. GM were surprisingly strong at 47.5% and 450bps above our 43.0% due to a favorable product mix (iPhones 58% of sales), lower component costs (display, flash, DRAM), and one-time benefits accounting for approx. 135bps.” Raising price target to $670. 

Society Generale’s Andy Perkins: China demand for iPhones drives excellent quarter. “We had become concerned that Apple could struggle to find high sales in markets traditionally dominated by low-end handsets. We believe that the results from China demonstrate that our concerns were misplaced, especially as we only saw sales from China Telecom and China Unicom for part of the quarter. Additionally, we calculate that the gross margin achieved by Apple on the iPhone is now approaching 60%, much higher than our previous forecasts.” Raising price target to $750.

Hudson Square’s Daniel Ernst: China — Maker and Buyer. “Guidance for 3Q was characteristically light citing pull forward of sales, and the usual expectation for margin compression.” Price target: $700.

Needham’s Charlie Wolf: In an oft-repeated refrain, Apple produces yet another strong quarter. ”To an increasing extent, Apple’s fortunes have become hostage to the iPhone in part because of the phone’s superlative gross margin. At 35.0 million units (vs. our estimate of 27 million), iPhone sales increased 88% year-over.” Price target: $620.

Evercore’s Rob Cihra: Upside Continues. “We see Apple’s still small share of huge markets leaving continued headroom for growth, including our CY12E estimate that Mac units grow +14%Y/Y (or 3-4X the PC market) but still account for just ~5.4% of overall PC shipments, iPhones grow +60%Y/Y to 149mil to surpass 25% share of the smartphone market but still account for just ~8% of the broader 1.8B cell-phone market, and iPads grow +66%Y/Y to 67mil units but are still just early in pioneering a mobile thin-client revolution. It’s not just about the product cycles, it’s about the platform.” Price target: $750.

Wedbush’s Scott Sutherland: Apple Shines. “While we are not modeling any contribution from Apple TV, we continue to expect an integrated TV to come out at a premium price point, with the key selling points being integration with the iCloud and a new user interface. We note that iCloud has 125 million subscribers signed up since the October launch and Apple has expanded its offering of movies and TV shows. This gives an Apple TV offering a very large immediately addressable market.” Raising price target to $800.

JMP’s Alex Gauna: Another Strong Beat on Overseas and iPhone Strength; Maintaining Market Perform. “The stock traded up over 6% in after- market response to the solid upside that included a 270 bps sequential improvement in gross margins to 47.4%; however, we continue to look for a better entry point into the name before recommending further accumulation given: a) there is likely to be a two-quarter gap between now and the iPhone 5 introduction, ahead of which sales could decelerate further as occurred with the iPhone 4S refresh, b) Android competitors such as HTC and Samsung are anticipated to best Apple time-to-market in terms of their next-gen 4G LTE device introductions that are on deck for May, and c) it is increasingly difficult to imagine that Apple is not operating at peak growth and margin levels, beyond which tech equity performance tends to struggle.” No price target.

Lots more coming in shortly.

Filed under: Apple 2.0

Fortune’s curated selection of tech stories from the last 24 hours. Sign up to get the round-up delivered to you each and every day.

* Apple (AAPL) bested many analyst predictions with quarterly profits of $11.6 billion on sales of $39.2 billion. That represents a 95% spike in profits compared with the same time a year before. Much of the increase had to do with stronger-than-expected iPhone sales of 35.1 million units.(CNNMoney)

Google finally launched the oft-talked about file-syncing service, Google Drive.

* Google (GOOG) finally launched its own file-sharing service, Google Drive, which operates similarly to Dropbox. Google Drive users will get up to five gigabytes of free storage for videos, photos, etc., and an additional 100 GB for $4.99 a month. (In comparison, Dropbox charges $19.99 a month for the same amount of storage.) (Fortune)

* Facebook’s IPO could be delayed due to what CNBC calls “a string of acquisitions and other business distractions.” Mark Zuckerberg’s focus on other areas could mean the start of trading may be pushed off until as late as end of May. (CNBC)

* Our review of Barnes and Noble’s (BKS) new Nook with GlowLight. (Fortune)

* Once seemingly unbeatable, Netflix (NFLX) has fallen on hard times, with weak subscriber growth predicted for the coming months and poor reviews of its first original series, Lilyhammer. Is the company doomed? (The New Yorker)

* The asteroid-mining venture Planetary Resources Inc., backed by director James Cameron, Google (GOOG) CEO Larry Page and Chairman Eric Schmidt, outlined its plan to send robotic spacecraft into space and mine asteroids for natural resources. (The Wall Street Journal)

* Why tablets will become most people’s primary computing device. (Forrester/Frank Gillett)

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Filed under: Today in Tech

Having fallen nearly 13% since April 10, the stock popped 7.44% on the news

FORTUNE — Having lost more than $70 billion in market value in two weeks, Apple (AAPL) capped one of the strangest earnings walkups in memory by handily beating all but the most optimistic estimates, reporting record March quarter earnings of $12.30 per share on sales of $39.2 billion.

Shares reversed course as soon as the news broke, climbing more than $41 (7.44%) in after hours trading. At the closing bell Apple had been trading for $560.28, down $11.42 (an even 2.00%) for the day and almost 13% below its April 10 intraday high of $644.

The biggest surprise, as far as the Street was concerned, was the iPhone unit sales number. After Verizon (VZ) and AT&T (T) reported iPhone activations down more than 4.3 million, analysts spent much of Tuesday predicting that the company would miss its targets — forgetting, apparently, that most iPhone sales take place overseas. iPhone sales in Asia were  up five-fold year over year, according to CFO Peter Oppenheimer.

“We’re thrilled with sales of over 35 million iPhones and almost 12 million iPads in the March quarter,” said Tim Cook, highlighting the two products that are driving Apple’s money-making machine.

The numbers:

Sales: $39.19 billion, up 58.9% year over year
EPS: $12.3, up 92.2%
iPhone:  35.1 million units, up 88%
iPad: 11.8 million units, up 151%
Mac: 4 million units, up 6.8% compared with 2% for the broader PC industry
Asian Mac sales: up 58%
iPod: 7.7 million units, down 14.6%
Gross margin: 47.4%, up from 44.7% last quarter
Revenue guidance: $34 billion
EPS guidance: $8.68
Gross margin guidance: 41.5%
Cash and marketable securities: $110 billion, up $12.5 billion from Q1

More after the earnings call. You can monitor the webcast here.

A few quotes:

Peter Oppenheimer: “I have to tell you that the new iPad is on fire.”

Tim Cook: “This is the 24th quarter in a row we’ve outgrown the [PC] market.”

Cook: “Anything can be forced to converge, but products are about tradeoffs. You can converge a toaster and refrigerator, but those things are probably not going to be pleasing to the user.”

Cook: “We believe iPhone is the best phone on the planet to entice a customer using a traditional cell phone.”

Cook: “We had the mother of all Januarys.”

Cook: “We are selling them [the new iPads] as fast as we can make them.”

Cook: “I always hated litigation. We just want people to invent their own stuff. I would highly prefer to settle than to battle.”

Cook: “It’s very important that Apple not become the developer to the world.”

That’s a wrap. Will post the results of our Earnings Smackdown first thing Wednesday.

Filed under: Apple 2.0, Fastest-Growing Companies

If Google’s new service sounds a lot like what’s already available from companies like Dropbox, that’s because it is nearly identical.

FORTUNE — After months of speculation, Google (GOOG) has finally unveiled its very own file sharing service, Google Drive.

In a blog post Tuesday morning, the search company called the new product “a place where you can create, share, collaborate, and keep all of your stuff.” The “stuff” Google is referring to are all kinds of files — videos, photos, documents, PDFs and the like. Users will now be able to upload pictures or spreadsheets to Google Drive and share them with a link, instead of sending a bulky file. They can also access their files from an app available on Android phones and tablets. A version for Apple’s (AAPL) iOS is in the works, as well.

MORE: Splunk makes a splash

If this sounds a lot like what’s already available from companies like Dropbox, that’s because it is almost exactly the same. The difference is that Google already has Google Docs — which will be built right into Drive — and that it is offering its service for less money. Users can get up to five gigabytes of storage for free, and a whopping 100 gigabytes for $4.99 a month. Dropbox charges $19.99 per month for the same amount of storage.

But that doesn’t mean Google Drive will kill off Dropbox, Box, SugarSync or any other player in the hotly-contested and fast-growing market for cloud storage services. Each of these companies is trying to carve out their own niche, and some have already managed to generate lots of traction, either with consumers or corporate users or both. Drive along the 101 freeway in the Silicon Valley and you’ll see the billboard wars these companies have been waging. (SugarSync’s new ad boasts “because your cloud shouldn’t have to fit in a dropbox.”)

As the lines blur between consumer and enterprise offerings, corporate-focused services are also competing for the same users. In the days leading up to Google’s announcement, enterprise-geared companies like IntraLinks and Egnyte have reached out to the press with their own preemptive commentary on the upcoming service. “The race to the bottom on price, value and simplicity will brightly contrast business focused products that offer security, scalability, IT controls and in our case, the benefits of a hybrid cloud based solution,” Vineet Jain, the CEO of enterprise file-sharing startup Egnyte said in a prepared statement.

MORE: Why Zynga loves the hybrid cloud

Despite being a little late to the game, Google is serious about the enterprise — it’s made that evident with its efforts to push Google Apps and Android into the workplace. And the company’s sheer size, ability to cut pricing and the widespread use of Google Docs, Gmail and other applications will likely help make Google Drive an attractive offering both in and outside the office. Let the cloud storage wars begin. Again.

Filed under: Uncategorized