Apple Earnings Beat Expectations

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Despite all the bad press about reception problems with the iPhone 4, Apple's third-quarter results beat Wall Street expectations. The key was unexpectedly strong computer sales.

RENEE MONTAGNE, host:

The iPad may be Apple's newest offering, but when the company announced quarter's earnings, yesterday, one of the stars of the show wasnt just the company's hot new tablet computer, it was an old stalwart.

NPR's Laura Sydell reports.

LAURA SYDELL: Apple's income rose 78 percent over last year at this time, to three and a quarter billion dollars. The company sold over three million iPads and is edging up on two million iPhone 4s. But it was the sale of good old Mac computers that took analysts like Gartner's Mike McGuire by surprise.

Mr. MIKE MCGUIRE (Research vice president, Gartner, Inc): In the hullabaloo and all the news about the iPad in the last quarter, and then the iPhone 4, and then everything after the iPhone 4 launched, people forget they still sell computers.

SYDELL: Some analysts also believe that the iPad, which let's users surf the website, read email and books and do other tasks, might have slowed the sale of Apple computers, but that clearly wasnt the case. The company sold three-and-a-half million computers, up about a third, over last year.

Looking ahead, analyst McGuire wonders if bad press about reception problems with the iPhone 4 will hurt sales as it launches in other markets around the world.

Mr. MCGUIRE: Will everybody in the other markets be as focused on the last month, as we in the U.S. have been?

SYDELL: During a conference call, COO Tim Cook didnt seem to think that the bad press was hurting sales in the U.S. Cook says that iPhone 4s are flying off the shelves as fast as Apple can make them. Cook also emphasized that the company had not made too few of the phones on purpose to create a shortage just to get buzz.

Laura Sydell, NPR News, San Francisco.

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