Apple exceeds sales estimates

Apple has reported another stellar quarter, exceeding estimates in just about every facet of its business.

For the company's fourth fiscal quarter, which ended 29 September, the company reported revenue of $6.22bn (£3.1bn) and profit of $904m (£443m), or $1.01 (50p) in profits per share. Wall Street analysts had expected Apple to report revenue of $6.1bn (£3bn) and profits per share of 86 cents (42p), according to estimates compiled by Thomson Financial.

Apple has now sold more than 1.39 million iPhones, and 1.1 million during the quarter, the company reported. Mac shipments were up 34 per cent compared to last year, and iPod shipments were up 17 per cent.

That iPhone price cut, however controversial among the early adopters, seemed to do the trick. As of 10 September, Apple said it had sold one million iPhones in total. So after the price was cut from $599 (£293) to $399 (£195), and the $499 (£244) 4GB iPhone disappeared, Apple sold almost 400,000 iPhones in 18 days, or more than a quarter of all the iPhones sold to date.

Tim Cook, Apple's chief operating officer, confirmed the company expects to sell 10 million iPhones in the calendar year of 2008 but he didn't set a target for iPhone sales during the holiday quarter. It took Apple two years to sell around one million iPods in the early days of that product, he said.

It's also clear Apple is gaining share on the rest of the PC industry. Last week IDC and Gartner had the worldwide PC market growing at around 15 per cent, while Mac shipments are growing more than twice as fast. Apple sold just over two million Macs during the quarter, a company record and 400,000 units better than its previous best.

Students helped account for the surge in Mac shipments, during a quarter that Cook called "the most successful back-to-school season we've ever had". Apple introduced new iMacs in August but it also ran a promotion for students that bundled a free iPod along with the sale of a new laptop.

That might have had something to do with the fact iPod shipments were actually lower than some Wall Street analysts had anticipated. Shaw Wu of American Technology Research had expected Apple to sell 11 million iPods but the company shipped a total of 10.2 million units. That was actually right in line, however, with a prediction from Piper Jaffray's Gene Munster, who cited an average analyst estimate of 10.9 million units.

Going into the holiday season, Apple expects to record $9.2bn (£4.5bn) in revenue and profits per share of $1.42 (70p), the company said. That's higher than what financial analysts were expecting for Apple's first fiscal quarter, a twist for a company that usually provides conservative guidance.

The holiday quarter is usually huge for the iPod division. Last year Apple sold 21 million iPods during its first fiscal quarter. And the new iPods that were introduced in September didn't really have much time to make an impact on the latest quarterly results.

Mac shipments are usually flat during the company's first fiscal quarter compared to the back-to-school totals as educational buyers drop off and holiday buying kicks in, said Apple CFO Peter Oppenheimer. When asked to look ahead to the current quarter, he seemed somewhat pessimistic that Apple could duplicate the amazing growth it showed during its fourth quarter. Cook, however, noted that Apple saw strong growth in Europe during the past quarter.