Apple sets Mac sales record

The company has sold 1.1 million iPhones and 2.2 million Macintosh computers in the quarter that ended September 29

Apple Monday announced it had sold 1.1 million iPhones and 2.2 million Macintosh computers in the quarter that ended September 29, with the Mac numbers setting a new record for the company.

Mac sales were up 34 percent over the same quarter last years, enough to break the previous best by 400,000 machines. Apple sold 817,000 desktop machines and 1.35 million notebooks during July, August and September, a stretch during which Apple ran its usual back-to-school promotion and rolled out a refresh of its iMac desktop lineup.

"Everything is clearly falling into place for Apple," said Ezra Gottheil, an analyst with Technology Business Research. "There's a wave of acceptance of the Mac as a viable alternative, even outside the U.S."

Apple's data noted that sales of Mac computers had surged 46 percent in Europe over last year, and 52 percent in the Asia Pacific region, which includes China but excludes Japan. Although the numbers of systems sold in the latter remained small -- just 155,000 for the three months -- Apple sold nearly half a million machines in Europe, slightly more than the company sold in all its retail stores.

The exchange rate played a part in those sales, said Gottheil, but the weakness of the dollar against other currencies, especially the euro, wasn't the only reason. "The Mac's becoming a reasonable choice because of the switch to Intel, the fact it runs Windows and [Microsoft Corp.'s] Vista kind of being a yawn," Gottheil added.

Price cut pays off big

The iPhone, meanwhile, reached total sales of 1.4 million since its late-June launch. Its impact to the bottom line, however, was minimal, since Apple spreads iPhone revenue earnings over the 24 months of the life of the AT&T contract customers sign. Apple refused to get specific about payments it receives from its wireless partner, however, even though during the previous quarter's call in July, executives hinted that they would be more forthcoming.

"What's interesting about the iPhone is that when you look at the numbers, you see that Apple sold about half as many as they did Macs," said Gottheil. "It's making an impact." Apple cited the August US$200 price cut as a major factor for iPhone sales volume. "Units moved once the price dropped," Gottheil said.

For the record, the Cupertino, California company posted earnings of US$904 million, up from US$542 million a year ago, one revenues of US$6.22 billion, compared with US$4.84 billion a year earlier. In July, Apple had forecast revenues of US$5.7 billion, and said it expected profit margin to drop from 36.9 percent to 29.5 percent to fund what it called "product transition."

Apple's actual margin for the quarter was 33.6 percent, considerably higher than the company projected even after it revamped both the iPod and iMac lines and lowered the price of the iPhone. Apple ascribed the less-than-anticipated drop in profit margin to greater-than-expected sales.

iPod sales were also brisk, said Apple, which claimed it sold 10.2 million of the digital music players during the quarter, an increase of 17 percent in units over the same quarter last year, but only a 4 percent boost in revenues. The most expensive model in the new line, the iPod touch, missed all but a few days of the quarter with its late-September launch. Apple, however, said it expected the touch to play a bigger part in iPod revenues going forward.

For the October-December run toward year's end, Apple has pegged revenue at US$9.2 billion, said Peter Oppenheimer, the company's chief financial officer. If that carries through, the revenue goal would be about 28 percent above the same quarter last year, when Apple raked in approximately US$7.2 billion.

"We're looking forward to a strong December quarter as we enter the holiday season with Apple's best products ever," CEO Steve Jobs said in a statement.

Apple shares closed at US$174.36 Monday, up US$3.94 or 2.3 percent.

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