In the iPhone Quarter, Macs and iPods Dominate

Apple announced their third quarter earnings yesterday and, while the iPhone owned the headlines during that period, the growth of Apple’s other segments of the market were the big story.

The iPhone
First, though, the iPhone. The iPhone was only for sale for 30 hours during this quarter, but Apple managed to sell 270,000 units. That would be a rate of 9,000 per hour, for those who keep track of those sorts of things. Apple CEO Steve Jobs predicted that they would have sold over a million iPhones by the end of the first full quarter of sales.

AT&T announced their profits and earnings on Tuesday, reporting a total of 146,000 activations, but analysts felt that number did not meet their expectations. The number released by Apple falls more closely in line with the original estimates. Clearly not everyone activated their phone the day they bought it (124,00 people, to be precise) which was understandable considering the issues—big and small—some had with activation. Apple reiterated its goal of selling 10 million iPhones by the end of 2008, which should be easier to manage considering its imminent European release.

The iPod
Apple shipped 9.8 million iPods, which was up more than 20 percent over the same period last year. The sustained growth of the iPod line has surprised most. The assumption was—as it has been in most consumer electronics markets—that once a player achieved a dominant position in a market, it would be hard to sustain exceptional growth rates. The iPod, however, has been able to buck that trend due in part to the fact that most people seem to replace their iPods every 2 to 3 years or so. Also, the market for solid competitors has been weak and Apple has been able to supply alternatives for every lifestyle and budget.

The Macintosh
The rate of growth in the sales of Macintosh desktops and portables seemed to be the most impressive. Apple sold 1.76 million units in the past quarter, which represents a 33 percent growth over the same period last year. Notebooks had a much more brisk 42% growth in unit sales over last year, which has been the trend for quite some time now.

The sales of Macintosh computers are a sales record for Apple—this is the highest number of Macs sold in a quarter, beating the previous record by 150,000 units.

The Stock
Apple shares have risen 62 percent since January. Ever since Jobs unveiled the iPhone, the stock has enjoyed a steady rise. Though the stock fell again over the past couple of days in anticipation of weak earnings news, and in light of the evidence from the AT&T earnings statements, in after hours trading on Tuesday, it gained another 8.3 percent. The stock has doubled over the past year.

Apple’s net income for this quarter was $818 million, or 92 cents per share, which is 80 percent higher than the same period last year. Apple had been expected to earn $644.4 million in a poll of major analysts by Reuters, which the company has managed to beat quite handily. The stock has done extraordinarily well in after hours trading on Wednesday and should do well Thursday.