Sales Of iPad, iPhone Devices Fuel Record Q3 For Apple


If Apple is suffering any ill financial effects from its problems with the iPhone 4, they aren’t showing up -- yet.

Riding surging sales of its iPad and iPhone products, Apple on Tuesday reported record revenue for its fiscal 2010 third quarter ended June 26.

The company reported revenue of $15.7 billion, up more than 61 percent from $9.7 billion in the third quarter of 2009. Earnings grew nearly 78 percent to $3.3 billion from $1.8 billion one year ago.

The company sold 8.4 million iPhones during the period, a 61 percent unit increase. Apple launched the iPhone 4 on June 24 and the quarter ended two days later, so it’s a good guess most of the quarter’s iPhone sales were of older generation devices, although Apple doesn’t break out sales by model.

Apple said July 16 that it had sold 3 million iPhone 4 devices. But it has been battling complaints of about the design of the device’s antenna which causes lost reception when held a certain way.

Last week CEO Steve Jobs, in a press conference, said less than 1 percent of users have reported the glitch to customer service centers and that the return rate for iPhone 4s is less than one-third that of iPhone 3GS phones.

Apple has promised to provide customers with free bumper cases that cover the antenna in an effort to end the controversy.

Making a splash in the quarter was the Apple iPad, which debuted April 3 and racked up sales of 3.27 million units in the third quarter.

Apple also said it sold 3.47 million Macs during the quarter, a 33 percent unit increase from last year’s third quarter, while unit sales of iPods declined 8 percent to 9.41 million.

Financial analysts on an earnings conference call with Apple executives questioned whether iPad sales are cannibalizing sales of Mac computers. While chief operating officer Tim Cook said that was hard to judge, he noted that the 3.47 million Macs sold in the quarter was a record -- despite coming in the same quarter Apple began selling the iPad device.

Analysts asked when Apple would be able to meet demand for iPads and iPhone 4s. Cook couldn’t provide an answer. “We're selling them as fast as we can make them," he said, adding that the company is "working around the clock to bring supply and demand into balance."

Given that the tablet computer market is relatively new, Cook said Apple is still trying to project iPad sales, calling demand so far “a jaw-dropper. Our gut tells us this market is very big.”

Apple expects revenue of about $18 billion in the current quarter.