Apple (NASDAQ:AAPL) released first quarter 2011 results last Wednesday with revenues climbing to $24.67 billion dollars from $13.50 billion dollars a year ago. Earnings per share jumped to $6.40 from $3.33 per share a year ago.
Unit growth of iPhones jumped by 113% over a year ago with 18.6 million iPhones sold during the quarter. Macs showed 28% volume growth and iPods grew by 17%.
Despite the disaster in Japan, Asia-Pacific sales drove Apple's growth with Mac sales increasing by 76% and profits up by 151% year-over-year.
Volume growth in Macs is even more impressive when you consider that IDC's latest estimate for the PC market is a 3% contraction.
IPhone sales in China rose by close to 250% and U.S. sales are up by 155% from a year ago.
Eighty eight percent of the Fortune 500 companies are testing or deploying the iPhone and 75% of Fortune 500 companies testing or deploying the iPad within their organizations, a market that once seemed closed to Apple.
IPad sales were strong at 4.69 million iPads sold during the quarter. This was below analyst estimates but every single iPad produced in the first quarter was sold.
According to COO Tim Cook, the iPad has the "mother of all backlogs."
The iPad successfully bridges the gap between laptops and desktops in a way that netbooks could not. One only has to look at netbook sales which are collapsing as people switch to a more functional tablet and the iPad provides a functionality that is only beginning to be scratched by end users.
Due to the strong demand it was recently announced that Apple would add another iPad2 touchscreen manufacturer to the stable, Chimel Innolux, an affiliate of Apple's manufacturing partner Foxconn Technology Group (FXTCF.PK).
The addition of another supplier indicates continuing strong demand for iPads and an attempt to further secure global supplies of key manufacturing products.
One aspect that may have been overlooked is the strong growth of the App Store with more than $2 billion in payments sent to developers since opening the App Store and over 10 billion downloads.
While Android is making significant inroads in the smartphone OS market their inability to sell apps hurts the overall product. iPhone users download more apps on average than Android users which helps contribute to Apple's bottom line and increases the user experience using the iPhone.
As VPN apps are strengthened and enterprises begin adopting the iPad and iPhone this will lead to a cascading effect through the App Store.
Instead of having to carry around a five pound laptop in the field sales agents will be able to carry an iPad or iPhone, sync back to their office computer, update emails, and meeting notes.
The key timesaver for the tablet at the enterprise level is to eliminate the high level computational functions which a laptop and desktop serve while maintaining the ease of use for everyday business functions. Items that do not require a significant amount of computing power such as checking email, calendar, notes, etc. can easily be accessed through a tablet.
On May 19 Apple will celebrate the 10th anniversary of the retail stores. The retail stores hosted 71.1 million visitors during the first quarter, a significant increase over the 47 million visitors a year ago.
Apple anticipates opening 40 new retail stores in 2011 with five new stores in China.
Apple stock is a buy at the current levels. Unbelievable demand in the U.S. and China for the iPhone combined with strong demand for the iPad creates strong momentum going forward.
The only thing constraining Apple at this point in time is their ability to make enough iPhones and iPads as every iPad manufactured during the quarter was sold and the second quarter appears to be the same.
Adoption of Apple products by Fortune 500 companies opens up the business arena which was previously closed and puts pressure on companies like Dell (DELL) and HP (NYSE:HPQ) to defend their entrenched turf.
Apple's stock has rebounded off the $325 level and looks ready to retest old highs. Investors would be well advised to go long Apple and reap the benefits of the bountiful harvest to come.
Disclosure: I am long AAPL.