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Apple Beats the Street As iPod, Mac and iPhone Shine

Apple says our research shows that 95 percent of iPhone customers would recommend the iPhone to others.

Apple blew Wall Street out of the water with its fourth quarter earnings on Monday after market close on strong sales of iPhones, the iPod family and Macintosh computers.

The company earned $904 million, or $1.01 per diluted share on revenues of $6.22 billion for the quarter ended Sept. 29, 2007, up 67 percent over the same period last year when the company pulled in $542 million, or 62 cents per diluted share, on revenues of $4.84 billion.

Analysts polled by Thompson Financial expected 86 cents per share on revenues of $6.07 billion. The Cupertino, Calif.-based company, known for its sleek product designs and niche-market savoir faire shipped more than 2.1 million Macintosh computers in the quarter, up 34 percent from last year.

Portable computers represented 62 percent of the Macintosh market in the fourth quarter and were up 37 percent over the fourth quarter last year. The iMac, whose latest line was launched in August, saw 31 percent growth year over year.

The company expects a strong December quarter due to "the strongest product line up in Apple's history," said Peter Oppenheimer, CFO, in a conference call with analysts announcing the company's results. "We're quite confident in the business and we've exited with September quarter with a lot of momentum."

For the fourth quarter, iPod sales grew 17 percent year-over-year to 10.2 million units. The company launched its latest batch of iPods last month with the 6 GB and 8 GB versions of the iPod Touch, modeled after the iPhone, and 80 GB and 160 GB versions of its previous incarnation, now branded the iPod Classic. Apple also launched a re-designed iPod Shuffle.

In its first full quarter of sales the long-awaited iPhone sold more than 1.1 million units in the quarter, bringing the number of iPhones on the market to almost 1.4 million.

In spite of recent lawsuits alleging that Apple and its exclusive iPhone wireless carrier AT&T have engaged in monopolistic behavior, "our research shows than an amazing 95 percent of iPhone customers would recommend the iPhone to others," Oppenheimer told analysts.

Apple said on the call that it is working with Salesforce.com to modify the company's software for the iPhone.

iPhone sales are expected to grow significantly as the device becomes available outside the U.S. "We're every enthusiastic about our entry into the European mobile phone market next month," Oppenheimer said.

Apple ships is next-generation Leopard OS on Oct. 26.

Shares of Apple rose to $184.33, up almost 6 percent in after-hours trading.

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