Apple enjoys solid Q3 on strong iPad, iPhone sales

IPhone and Mac sales grew in the quarter

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Apple on Tuesday reported strong earnings for its third fiscal quarter of 2010, with strong iPhone, Mac and iPad sales helping revenue exceed analyst expectations.

The company in the quarter released the iPhone 4, which CEO Steve Jobs characterized as the most successful product launch in the company's history. Apple also launched the iPad during the third quarter, with shipments totaling 3.27 million units.

Apple reported revenue of US$15.7 billion for the quarter ended June 27, up from the $9.7 billion in revenue for the third quarter last year. The revenue also beat estimates of $14.74 billion from analysts polled by Thomson Reuters.

The company reported net income of $3.25 billion for the third quarter, an increase from $1.83 billion the company reported in the year-ago quarter. The company reported diluted earnings per share of $3.51, beating analyst estimates of $3.11.

"IPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year," Jobs said.

Mac computer shipments were 3.47 million, a 33 percent year-over-year increase. Apple sold 8.4 million iPhones during the quarter, a 61 percent year-over-year growth. iPod shipments, however, fell by 8 percent to 9.41 million units.

The company is projecting revenue of about $18 billion and earnings per share of about $3.44 for the fourth fiscal quarter.

The iPhone 4 launched on June 24 in five countries. The smartphone received praise initially, but users soon started complaining about reception issues, with signal strength dropping significantly if the phone was held in a way that covers the wireless antenna. Apple on Friday addressed the controversy, saying it would offer free bumper cases until the end of September to alleviate customer concerns about signal and reception issues. The company is also offering a full iPhone 4 refund within 30 days of purchase for unsatisfied customers.

The iPad is expected to remain a strong product for the company as it faces very little competition in the tablet space. Market research firm iSuppli on Tuesday said it expects iPad shipments to touch 12.9 million units in calendar 2010, an increase from the previous forecast of 7.1 million units.