“We’ve had a great response here in Japan,” Ballmer said. “Certainly we’ve seen initial sales be fantastic. The first ten days were bigger than the first ten days of XP or Vista or any other Windows launch that we have done.”

And indeed that would seem to be the case. According to research outfit NPD, Microsoft (MSFT) sales of Windows 7 in its first few days on the market were more than triple Vista sales for the same length of time.

No wonder it was a blowout quarter.

After market close Monday, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, on revenue of $9.87 billion. That topped the estimates of analysts surveyed by Thomson Reuters, who’d expected the company to earn $1.42 a share on revenue of $9.2 billion.

The company sold 3.05 million Macs during the quarter, a 17 percent increase over last year. It sold 10.2 million iPods, an eight percent decline from the year-ago quarter.

And iPhones? Apple (AAPL) sold 7.4 million of those–seven percent more than during the same period last year. So much for those supply-chain issues that some analysts warned might undermine iPhone sales.

“We are thrilled to have sold more Macs and iPhones than in any previous quarter,” said CEO Jobs. “We’ve got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.” [Editor's Note: "...really great new products"--is that code for a tablet?]

Apple shares, which closed at $189.86 today, are spiking as I write this. At $203.90, they’re up more than seven percent in extended trading.

Looking ahead to its fiscal first quarter, Apple estimates it will earn between $1.70 and $1.78 a share on revenue in a range of $11.3 billion to $11.6 billion. That’s comically lower than the $1.91 a share on $11.45 billion in sales that analysts are forecasting. But as today’s results clearly demonstrate, Apple subscribes to the underpromise-and-over-deliver school of guidance theory, so there’s likely little cause for concern.

So, to recap: Apple sold more Macs and more iPhones than in any previous quarter in the company’s history. Before the holiday quarter. And in midst of the worst economy we’ve seen in 50 years.

Notes From the Earnings Call:

• Apple COO Tim Cook and CFO Peter Oppenheimer are handling the earnings call. CEO Steve Jobs will not be attending.
• Oppenheimer says this was Apple’s second-highest quarterly revenue ever. Highest-ever operating margin. “We are thrilled with these record-breaking results, particularly given the economic environment around us.” Obviously.
• Macs are showing “fantastic momentum,” says Oppenheimer. Sales have outpaced the market in 19 of the past 20 quarters. Quarterly sales were up 17 percent; portable sales, 35 percent. Interesting: 42 percent growth in Asia.
• Moving on to iPods: Sales were down to 10.2 million from 11 million a year ago. But iPod touch sales doubled. MP3 market share in the U.S. is now more than 70 percent (according to NPD, I think).
• iPhone sales were up seven percent. Apple will begin selling iPhones in China later this month. More than 85,000 apps in App Store. Two billion downloads.
• Apple opened 15 new stores during the quarter. Now has 273. Will soon open first two stores in France, including one at the Louvre.
• Moving on to the Q&A. Asked about those iPhone 3GS supply issues I mentioned earlier, Cook acknowledges that demand did outstrip supply in a number of countries. But the situation improved “markedly” in September. How are things looking for China? Cook: “I would have liked to have had more, honestly, because we were still short in some countries at the end of the quarter.”
• Apple is obviously very excited about the iPhone’s impending debut in China. “There’s a good opportunity, and we’re really excited to get started,” says Cook. “It’s the largest market in the world in terms of total phones.”
• No comment on the broader economy. “We just spend our time projecting our business and leave the economy to the economists.”
• Does Apple worry about iPhone rivals? Android? Not really, says Cook. “We feel very good about suiting up and competing against anyone.” Our competitors are still trying to catch up with the first iPhone, he adds.
• Snow Leopard? Cook says the company’s been “pleasantly surprised” by sales of Apple’s latest OS.
• How does Apple benefit from carrier-exclusivity iPhone deals? Cook says carriers with exclusivity deals are willing to invest more in the platform and that means greater innovation. Visual voicemail is an example of that. That said, he adds, “We’ve found no lack of people wanting to sell iPhones, frankly.”
• International store revenue up more than 20 percent, on average.
• More on iPhone supply issues. Cook insists this is not a component issue, though he notes that silicon can sometimes be hard to get. “We feel good about our position now.”
• And still more on iPhone supply issues: How many iPhones would Apple have sold if it had an adequate supply? Impossible to say, really, Cook says, adding that 3GS units were in short supply virtually everywhere in September.
• Enterprise demand for the iPhone is very strong. It’s either being deployed or already in use at some 50 percent of Fortune 100 companies. Same with Europe and the FT 100. Widely used in higher ed and government as well.
• But perhaps not widely enough. Asked about institutional sales, Cook says Apple isn’t seeing much stimulus funding. The company’s worried about state spending. Says Cook, “We may see more this quarter, but it’s too early to tell.”

As the analyst notes, NPD data for the first two months of the September quarter show Mac sales up about seven percent year over year. iPhone sales are even more robust.

“Our checks indicate that worldwide demand for the iPhone 3GS is outstripping supply,” Munster writes. “This strong level of demand, we believe, will support unit sell-through of about 7.5m units in the Sept. quarter.”

Continuing, Munster notes that “PJC Wireless Analyst Mike Walkley’s checks for the first two months of the Sept. quarter indicated constraints at retail for the iPhone 3GS. We have also seen signs of constraints in international markets. Media reports indicate that the CEO of wireless carrier 3 Italia indicated that the company is selling 20k iPhones per month, but could sell more than double that amount if it had adequate supply.”

If this is problem, Munster asserts, it’s a fleeting one: “While supply constraint is a issue near-term, we see it as a long term positive, as worldwide demand appears to be very strong for the iPhone 3GS.”

In quarters past, Apple has guided revenue four percent below Street expectations on average and earnings-per-share 12 percent below Street expectations. But the company’s actual results have typically beaten those estimates by an average of three percent on revenue and by 24 percent on earnings per share. Munster expects this to be the case again when Apple reports earnings on Monday.

Over at RBC Capital Markets, analyst Mike Abramsky sees Apple’s forthcoming earnings report playing out in much the same way for largely the same reasons. “Checks show that the iPhone 3GS is the most popular Smartphone at AT&T and other global carriers (e.g., O2 UK, Rogers),” he wrote in a note to investors today.

“Despite launch in June,” Abramsky added, “some models of the iPhone 3GS were stocked out at Apple retail stores and carrier stores through Q4; however, checks show retail availability appears to have improved early September. While sell-through of the prior-gen iPhone 3G has been slow at AT&T since the launch of the iPhone 3GS, we believe the $99 iPhone 3G is gaining traction outside North America given lower upfront cost (important where prepaid is high).”

That’s the conclusion of an NPD survey that suggests that Mac households favor multiplatform environments, buy more gadgets and have the higher income needed to afford them.

“While Apple owners tend to own more computers and more electronics devices, there is also a high correlation among Apple owners and more affluent consumer households,” said NPD’s Stephen Baker. “The average Apple household owns 48 CE devices whereas the average computer household owns about 24.” (See chart below; click to enlarge.)

Not a surprise, really. Presumably, if you can afford to purchase a $1,199 laptop or desktop, you can afford to buy an assortment of other gadgetry to go along with it. A couple of other data points worth noting:

• 66 percent of Mac households own three computers or more, compared to 29 percent of Windows households.
• 63 percent of Mac households own an iPod. The same can be said of only 36 percent of all computer-using households.

Sadly, NPD’s survey didn’t explore how PCs are used in Mac households or how they ended up there in the first place. Are they leftovers from a PC-to-Mac switch? Are they corporate laptops? Entry-level machines for the kids? High-end gaming machines?

And it continues to sell well. While Leopard and Tiger sales declined more than 60 percent after their first week at market, sales of Snow Leopard have only declined 25 percent in the two weeks it’s been available.

“Even though some considered Snow Leopard to be less feature-focused than the releases of Leopard or Tiger, the ease of upgrading to Snow Leopard and the affordable pricing made it a win-win for Apple computer owners–thus helping to push sales to record numbers,” NPD’s Stephen Baker said in an announcement.

“With pricing reduced by more than $100 for both the single-user and five-user pack versus Leopard pricing,” Baker added, “Apple has clearly demonstrated that aggressive pricing policies in this economic environment generate an outstanding consumer response.”

In a research note issued earlier this summer, Piper Jaffray analyst Gene Munster estimated that Apple (AAPL) would sell about five million copies of Snow Leopard in the quarter in which it was launched. And while that number might have seemed optimistic at the time, it’s looking increasingly more reasonable. Leopard, as you might recall, sold more than two million copies its first weekend at market. If Snow Leopard is selling twice as quickly, Apple should have no trouble hitting Munster’s target and perhaps even passing it.

And it’s not going to be getting one anytime soon, either, despite rumors that Microsoft is working on one and courting developers to port their iPhone apps over to it. Which is not to say that the company isn’t building an answer to Apple’s App Store–it is. Redmond is just building it for Windows Mobile, not Zune.

“We’re trying to get out of the business of building similar things in the company that don’t work together, and the Windows Mobile team is tackling the challenge of a mobile apps marketplace right now,” Zune marketing manager Brian Seitz told TechFlash. “We don’t necessarily line up perfectly with that, to take advantage of whatever ends up coming out of that from the Zune HD standpoint, but down the line if there’s a way that we can plug into what they’re doing, I’m sure we’ll look into whether that makes sense for the business.”

But by then, of course, it will be too late. Arguably, it’s too late already. As Apple gleefully noted during its annual music event last week, NPD pegs the company’s share of the portable media device market at nearly 74 percent. Meanwhile, Microsoft’s tops out at an estimated 1.1 percent.

Raising that share was already a Sisyphean task for Microsoft (MSFT), and it has only become more difficult now that Apple (AAPL) has introduced not just a new iPod nano with a built-in video camera and FM radio, but also a more inexpensive iPod touch.

Microsoft is pricing the 16GB Zune HD at $219.99 and the 32GB version at $289.99. But you can get a 32GB iPod touch for $299. And you can get an 8GB touch for $199. Now, granted, the touch offers only half the storage of the 16GB Zune HD, but it supports the iTunes App Store. And if you really want that extra 8GB, you can always buy an iPod nano, which shoots video and at $179.00, is $30 cheaper than the Zune HD.

According to the research outfit, Mac sales for July and August are up seven percent year-over-year. If this proves true, Apple (AAPL) should sell somewhere around 2.75 and 2.8 million Macs in the quarter, which would match or slightly exceed Wall Street consensus estimates. IPod sales should meet estimates as well, though NPD reports that year-over-year sales during July and August were down 16 percent.

Munster figures Apple will sell 9.5 million to 10.5 million iPods for the quarter. The Street is looking for 10 million, and with the launch of the newest nano, Apple will likely meet this goal.

“We are expecting reacceleration in the final month of the quarter given the new iPod nanos that shipped on 9/9,” Munster explained. “Also, iPod international is growing faster than domestic. In other words, we believe the actual reported numbers for iPod will be slightly better than NPD would suggest.”

If it was, surely we wouldn’t be seeing the sixth consecutive month of declining sales reported by NPD. According to the market research firm, overall sales in the United States in August of hardware, software and game accessories were $909 million–a 16 percent drop from the same period a year ago.

Hardware sales were down 25 percent for the month and 17 percent for the year. Software fared little better. It was down 15 percent for the month and 14 percent for the year.

Six straight months of falling sales. Overall, the industry is down 14 percent for the year, earning nearly $9.1 billion so far in 2009, according to NPD. Is this a trend that can be dismissed with the standard “well, software drives console sales” explanation? I’m not so sure. It’s not like Mario Kart and Madden NFL 10 have disappeared from the shelves. Indeed, they’re still top-selling titles. They’re still driving sales. They’re just driving a hell of a lot fewer of them.

Indeed, Electronic Arts (ERTS) CEO John Riccitiello bemoaned this very fact in an email to employees, released yesterday. “It is discouraging that one of our highest-rated and best-marketed ‘Madden’ titles in years is facing strong headwinds,” he said, adding industry trends “present a challenge.”

Perhaps that’s because we’re in the middle of the worst American recession in 50 years and $40 for a videogame is still $40. I’ll bet $5 and my old Intellivision that the videogame industry will post its first year-over-year loss since 2004 this year.

Hardware Sales:

1. Nintendo DS     552.9K
2. Wii     277.4K
3. Xbox 360     215.4K
4. PlayStation 3     210.0K
5. PSP     140.3K
6. PlayStation 2      105.9K

Top 10 Software Sales:

1. Madden NFL 10 (Xbox 360, Electronic Arts): 928,000
2. Wii Sports Resort (Wii, Nintendo): 754,000
3. Madden NFL 10 (PS3, EA): 665,000
4. Batman: Arkham Asylum (360, Square Enix): 303,000
5. Batman: Arkham Asylum (PS3, Square Enix): 290,000
6. Madden NFL 10 (PS2, EA): 160,000
7. Dissidia Final Fantasy (PSP, Square Enix): 130,000
8. Wii Fit (Wii, Nintendo): 128,000
9. Mario Kart Wii (Wii, Nintendo): 120,000
10. Fossil Fighters (DS, Nintendo): 92,000

With consumers postponing their Mac purchases in expectation of a desktop refresh, Apple saw double-digit declines in Mac sales for the month, according to the latest NPD data. They were down 16 percent compared to February of 2008. A decline, but one that’s not quite as grave as it first seems, as Piper Jaffray analyst Gene Munster notes. “[We] note that year-over-year Mac performance faced a tough comp in the month of February 2009 due to the February 2008 MacBook Air launch,” Munster explained. “That said, we expect Mac NPD data to rebound in the month of March due to the shipment of new iMacs, Mac minis, and Mac Pros in early March.”

For the March quarter, Munster believes Apple (AAPL) will sell between 2 and 2.2 million Macs–a decline of between 13 and 14 percent. Not so bad considering that Gartner predicts PC sales will chart their sharpest unit decline in history this year. Really, the fact that Apple is selling desktops at all in this economy is worth cheering.

Seems the econalypse and the absence of a “must-have product” really played havoc with spending during our annual consumer binge. Said Baker, “Not only was there not a really hot product, not only did the economy tell people that they shouldn’t buy stuff, but the stuff I have [is] more than good enough in most cases.”

A remarkable metric, given the economic downturn. How is it that gaming is thriving at a time when the global financial crisis is squeezing wallets? “There are a couple of reasons,” Ron Meiners, director of community for the Hollywood Interactive Group, recently told News.com. “One is the traditional value of entertainment during tough economic times. Like the great fantastic musicals in the 30s. Movies did great, because they took people’s mind off of the troubles they were facing. [And] videogames have great value as entertainment. The number of hours of solid entertainment that comes from a videogame purchase is much greater than a movie, for example, for very comparable cost.”