Apple Q1 Financials Set New Record For iPods, Macs.

What goes up must come down. But as long as it’s going up, who cares, right?

Apple announced Q1 2007 financial results—record sales, profits, units sold. Record Mac and iPod shipments, too.

Wall Street was stunned by Apple’s better-than-expected financials to start the new year.

The company’s press release tells the tale. iPod shipments blew away all expectations, as did sales of the MacBook and MacBook Pro line of notebooks.

As expected, desktop sales languished in the holiday quarter, though units and sales and profits and margins were up in all other categories. Apple provided additional details of the record quarter.

Gross margins exceeded 31-percent. The company shipped over 21-million iPods, 50-percent higher than a year earlier. 1.6-million Macs were shipped in the quarter, 28-percent higher than a year ago.

The Mac represented 43-percent of total revenue, while the iPod, music, and services contributed 57-percent of the total.

Apple claims that overall marketshare of the iPod increased in the Q1 period in the US and all other countries for which data was available.

As to the stock options scandal and investigation, Apple’s CFO Peter Oppenheimer said results from the company’s investigation was turned over to the SEC and federal investigators.

Looking forward, Apple’s guidance for Q2 is substantially less than Q1, though higher than 2006.

When asked about Mac OS X Leopard, Oppenheimer said Apple is on target to deliver the new OS in the spring of 2007.

Apple said that Mac retail distribution points exceeded 7,500 worldwide, while the iPod exceeded 40,000 retail locations. Oppenheimer also said Apple’s reason for selecting Cingular’s 2.5 G EDGE network over the faster 3G network had to do with greater market coverage by the former.

The Best Buy retail store pilot remains in an evaluation. Apple said the iPhone sales target of 10-million units was for the calendar year of 2008.

Oppenheimer said Apple sees the AppleTV as the DVD player of the 21st century. iPod revenue and unit sales actually decreased slightly at Apple retail stores, due to expanding the iPod retail channel to additional stores.

Apple says it is difficult to predict cannibalization of the iPod line by the iPhone, but noted that the iPhone would more compete at the high end of devices initially.

50-percent of all new Mac buyers in the Apple Stores are new to the Mac (switched from Windows). This trend is growing in other retail channels in the US.

Apple said Boot Camp has been downloaded 1.5-million times. The iTunes Store now has over 4-million songs, 350 television shows, and 250 movies. iTunes Store sales double year over year.

As to the iPhone name suit by Cisco, Apple termed it “silly” and said Apple was the first to use the iPhone name as a cell phone; Apple will prevail.

Apple’s retail stores account for 6,000 of the company’s total 21,000 employees. The company plans to open 35 to 40 new retail stores in 2007.

Apple’s Press Release

Apple provided a live streaming of its Q1 2007 financial results conference call.