Apple's Rainy Season

Even with burgeoning iPod sales, company officials indicated that they could have sold even more of the digital music players in the quarter. What stopped them from doing so were supply constraints, particularly on the 4GB iPod nano, company officials said. Relative to its expected holiday quarter sales, the company began and ended the period with iPod channel inventory below its targeted range of four to six weeks' worth of units, Oppenheimer said.

iPod inventory was "lower than we would have liked," he said.

However, given that the company expects to sell fewer iPods in the current quarter, inventory for the music players is now within the company's ideal range, Oppenheimer said.

On a unit basis, Mac sales cooled off somewhat, but remained strong, growing 20% over the same period a year earlier to 1.25 million units. But dollar sales grew just 7% year over year to $1.72 billion, due to a slump in desktop sales, indicating that the company was having more success selling low-end models than its higher-end ones.

Despite the slowdown in Mac shipments -- unit sales grew 48% in the company's fourth fiscal quarter -- company officials said sales were above their internal projections. The company expected -- and saw -- a "pause" in sales last quarter due to customer anticipation of what it would announce at last week's Macworld conference. The company ended up unveiling two Intel-based computers five months earlier than company officials had previously projected.

On the call, company officials warned that the relatively soft Macintosh sales could continue in the current quarter due to supply issues. Apple won't begin shipping its new Intel-based notebook, the MacBook Pro, until sometime next month, meaning that it might not be able to meet demand for it in the quarter, officials said. While the company is "hopeful" that it will meet demand for its new Intel-based iMac desktop computer, it has seen strong demand for it thus far.