Well, we now know why Apple dropped the word "computer" from its name and it doesn't have anything to do with HDTVs. In a conference call last night to discuss its quarterly results, Apple said it sold nearly 6.9 million iPhone 3Gs during the quarter. The company spreads that revenue out over the two-year contract, but if it were to book the sales all at once, iPhone 3G sales would've represented nearly 40% of Apple's total revenues for the quarter.
Still Mac sales remain strong and continue to grow at a faster rate than the overall PC industry. Apple shipped more than 2.6 million Macs, an increase of 21% over the same period a year ago. Mac sales might've been even better if it weren't for two factors. Apple said it saw a big dip in large orders from education K-12 as state and local governments started to feel the squeeze from the slowing economy. And toward the end of the quarter notebook sales--more than two-thirds of total Mac sales--slowed down as customers waited for the new MacBooks, which were announced on October 14.
Of course Apple did not announce the rumored $800 MacBook (though they did get the entry-level model down to $1,000) and there's been a lot of discussion of whether sales of pricier MacBooks and MacBook Pros will hold up in a worsening economy. On the call, CEO Steve Jobs said customers might put off purchasing a new Mac for a while, but they were unlikely to abandon Apple altogether, and the company still has plenty of room to grow its market share in both cell phones and computers (more than 50% of the Mac sales in Apple stores are customer who've never owned a Mac). Apple also heads into the holiday quarter with a strong product lineup and a big cash cushion. "We are not economists," Steve Jobs said on the call. "We may get buffeted around by the waves a bit, but we'll be fine."
But Jobs also dropped the strongest hints yet that if the demand for low-cost laptops, and in particular netbooks, continues to grow, Apple will jump into this market. "The netbook is a nascent category and, best as I can tell, not a lot have been sold," Jobs said. "But we'll wait and see how that category evolves and we've got some pretty interesting ideas if it does evolve."