The iPhone's Not the Cause of Apple's Success - It's the Effect

How can a brand like Apple manage to turn out the kind of growth it enjoyed last quarter in this kind of economy, especially considering that its products generally tend to be pricier than its competitors'? It's tempting to credit iPhone sales for Apple's Q3 numbers, but perhaps the secret really lies in the importance placed on quality, durability and longevity during tight times.

o the delight of Apple (Nasdaq: AAPL) fans everywhere, the company is kicking butt and taking names. There's really no way around that statement, and Apple's most recent report for its fiscal 2009 third quarter backs it up. The company in Cupertino posted revenue of US$8.34 billion and a net quarterly profit of $1.23 billion, which is up compared to revenue of $7.46 billion and net quarterly profit of $1.07 billion in the year-ago quarter.

That's right, Apple grew revenue and profit in one of the worst economies of the modern tech age.

Better yet, Apple reported that its gross margin was 36.3 percent, up from 34.8 percent in the year-ago quarter.

Apple sold 2.6 million Macintosh computers during the quarter, representing a 4 percent unit increase over the year-ago period. While its sales of 10.2 million iPods represented a 7 percent unit decline from the year-ago quarter, it was hardly unexpected by Apple.

"We have three categories of what we call pocket products," noted Apple CFO Peter Oppenheimer in the company's conference call with investors this week. "Traditional MP3players, iPod touch, and iPhone. For traditional MP3 players, which includes shuffle, nano, and classic, we saw a year-over-year decline, which we internally had forecasted to occur. This is one of the original reasons we developed the iPhone and the iPod touch. We expect our traditional MP3 players to decline over time as we cannibalize ourselves with the iPod touch and the iPhone." For details, you can listen to the Apple QuickTime replay stream or head over to SeekingAlpha for the transcript.

Continue reading the full story by Chris Maxcer at MacNews World