Apple's iPhone seen as new growth driver

By Rex Crum

Apple Inc. has had a good run for several years, first due to booming sales of the iPod and then the growing strength of its Mac computers.

While those products are still selling well, it now appears to be the iPhone's turn to become the standout product and complete the third leg of the company's business strategy.

Signs of that were apparent with Apple's (AAPL 96.38, -1.85, -1.9%) fourth-quarter report late Tuesday. It reported selling 6.9 million iPhones over the three-month period that included the release of the 3G version of the iPhone, in July, up from 1.1 million iPhone sales in the same period a year ago.

The performance was enough to get Apple Chief Executive Steve Jobs to make an almost-unheard of appearance on Apple's earnings conference call. Jobs highlighted that Apple's iPhone sales were greater than the 6.1 million BlackBerry smart phones Research In Motion Ltd. (RIMM 44.96, -1.24, -2.7%) sold in its most-recent quarter, and that Apple is now the world's No. 3 mobile-phone vendor, in terms of revenue.

"Who knows what the future will be given the worldwide economic slowdown?" the executive said. "But we ranked as the third-largest mobile-phone supplier in revenues. Not bad for being in the market for only 15 months."

Several analysts that follow Apple said that the iPhone had a breakout quarter, exceeding many forecasts by 2 million units. Additionally, Apple has begun recognizing revenue from iPhone sales over a two-year "economic life" of the devices, and such sales contributed to $4.6 billion to the company's adjusted revenue for the quarter of $11.68 billion.Continued...