The company said it sold 2.29 million Mac computers, 10.6 million iPods and 1.7 million iPhones in the quarter. Of those Macs, 856,000 of those were desktops, and 1.43 million were notebooks. The latter number is the significant one: Apple sold 1.34 million notebooks during the height of the holiday sales season, which meant that sales grew 6 percent. Historically, sales decline during this period. About the only down point was in iPod sales, which fell from 22.1 million units during the fourth quarter to 10.6 million units.

The result? The highest revenue and earnings for the March quarter in the company's history: $1.05 billion in profits on top of $7.2 billion. Even the outlook was strong: Apple expects about a 33 percent increase in revenue for the current third fiscal quarter. Analysts noted, however, that both gross and operating margin declined year over year, primarily due to a decline in sales in the Leopard operating system.

Retail sales soared, and foot traffic in Apple's 208 stores was up 12 million people, and the iPhone actually fell into an unexpected short supply within the U.S. as a result.

Apple execs said they believe a significant number of those iPhones are actually being purchased by foreign visitors hoping to take them home and unlock them for use in their own regions. Apple hasn't specifically condemned the practice, but said that it hopes to roll out the iPhone in as many geographies as possible, as quickly as possible; the company expects to sell about 10 million iPhones for the year, worldwide. The company also hopes to add retail stores in Australia and Switzerland this year, for a total of 45 new stores worldwide.

One iPhone note: for whatever reason, Apple is not going to recognize revenue for the new iPhones until after the June launch of its 2.0 firmware.

Components, such as LCD panels and hard drives, remain in a supply-demand balance and shouldn't affect the coming quarter, executives said. But one analyst pointed out that NAND pricing has been down about 65% for the majority of the year, the key component in flash-based music players.

The decline in margin was primarily due to a dip in Leopard pricing, from $170 million in the December quarter, to about $40 million in the just-completed second quarter, Apple executives said. Sales of iLive and iWork fell as well. But a price cut in the Shuffle music player and lower prices for international customers reflected the falling flash prices.