Apple delivers blowout quarter as iPhone sales surge

By Hibah Yousuf, staff reporter

NEW YORK ( -- Buyers just can't get enough of Apple's gadgets.

The company sold almost 11 million iPods last quarter and doubled its iPhone sales from this time last year, selling a record 8.8 million smartphones during the quarter ended March 27.

Those sales helped Apple on Tuesday report a profit of $3.1 billion on revenue of $13.5 billion, blowing past Wall Street's expectations.

And analysts think there's more record-breaking to come.

Sales of the iPhone in international markets more than doubled from a year ago and represented about 75% of the device's total sales, said Broadpoint AmTech analyst Brian Marshall.

"This kind of growth is sustainable going forward," he said. "They've just scratched the surface."

Mac demand is also on the rise. Apple sold 2.9 million computers during the quarter, 33% more than it did a year ago and a record for the period.

"We're thrilled to report our best non-holiday quarter ever," CEO Steve Jobs said in a prepared statement. "We've launched our revolutionary new iPad and users are loving it, and we have several more extraordinary products in the pipeline for this year."

Apple didn't answer one burning question: How many iPads has it sold since the tablet's April 3 release? But earlier this month, at a preview event for the upcoming iPhone OS 4.0 release, Jobs told the crowd that Apple had already sold 450,000 units.

During a conference call with investors following Apple's earnings release, chief financial officer Peter Oppenheimer said initial U.S. demand for the product "shocked" the company.

And that's just for the basic WiFi-only iPad, which carries a price tag that starts at $499. On April 30, Apple plans to begin selling iPads with access to AT&T's 3G network, for $629 a pop on up.

For the current quarter, which will be the first to reflect iPad sales, Apple forecasts earnings of $2.28 to $2.39 per share on revenue of $13 billion to $13.4 billion. But Apple is notorious for its conservative guidance, and analysts are looking for earnings of $2.70 per share on revenue of $13 billion.

Apple is also expected to introduce a fourth-generation iPhone later this quarter. A potential prototype of the new device was apparently lost by an Apple engineer at a bar and later obtained by Gizmodo, which published photos and specs of the device.

After receiving a letter from Apple requesting the phone back, the tech blog reportedly returned it to the company on Monday.

The new iPhone likely runs the yet-to-be-released iPhone OS 4.0, and could be available on the Verizon network, which would give Apple access to millions of potential new customers.

While Oppenheimer said the company is confident in its product lineup and "excited about the coming months," he remained tight-lipped and didn't comment on two of the hottest rumors: that Apple has a new iPhone in the works, and that it is considering breaking away from its exclusivity deal with AT&T and adding additional carriers.

Shares of Apple (AAPL, Fortune 500), which hit record highs last week, rose 6% in after-hours trading after falling 1% during regular hours.  To top of page

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