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Tuesday, July 20, 2010, 03:30 pm PT (06:30 pm ET)

Apple denies creating artificial product shortages for hype

Apple does not purposely create artificial product shortages to garner free press and generate hype among consumers, executives with the company said during Tuesday's quarterly earnings conference call.

Speaking to analysts and members of the press following the release of the company's quarterly earnings report, Chief Operating Officer Tim Cook said Apple does not intentionally build a small number of units to generate hype. Gene Munster with Piper Jaffray prompted the discussion when he asked Cook why Apple is always running out of products after a launch.

"We do not purposely create a shortage for buzz," Cook said, adding that all of the company's suppliers are working hard to fulfill orders.

Apple has been faced with a shortage of iPhone 4 units after its launch in late June, and Cook said that the company has struggled to keep up with demand. "We are selling every unit we can make," he said.

The case was different with the iPad, though, which was a new product category where Apple was unsure how many they would sell. Apple initially planned to make a million iPads per month, a number that Cook said was far more aggressive than most believed Apple could sell in the first year.

The company announced Tuesday that it has already sold 3.27 million iPads since the device went on sale. But Apple was simply caught off-guard by the demand for the iPad, Cook said.