Today it is among the most valuable companies in the world, riding high on record sales of a string of hit products that have redefined personal technology and our expectations for it. In just the first three quarters of this year alone, Apple has already racked up record sales of nearly $80 billion. By year’s end they’ll likely top $100 billion.

Something to keep in mind today as the market reacts to the sad news of Jobs’s passing.

But amid the inevitable volatility in Apple’s share price the next few days, remember this: Jobs’s absence will likely have no measurable impact on Apple’s financial performance for the foreseeable future, if ever. But his legacy of innovation will — and for years to come. As I’ve written before, it’s Apple, not the iPod, iPhone or iPad, that is Jobs’s masterpiece product, a company designed to set the bar for the industry, regardless of whether he’s leading it or not.

As Piper Jaffray analyst Gene Munster wrote in a note to clients late Wednesday, “We believe the ethos of Steve Jobs, his vision and his work ethic, will forever drive Apple. As such, we reiterate, without hesitation, our Overweight rating on [the company's shares]. We believe Tim Cook is the ideal candidate to continue the work of the irreplaceable Steve Jobs. … While there may be concerns among investors as to whether or not Cook can continue Jobs’ streak of innovation, we believe there is no better candidate to lead the company Jobs co-founded. And in many ways, it will be Jobs and his deeply rooted vision that will always guide Apple and its leaders.”

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As Oppenheimer analyst Yair Reiner said in a note raising his target price on the company’s shares to $425, “It’s no surprise when Apple tops expectations, but it’s fairly rare to see it trounce Street’s targets on almost every line. Bottom line: big as Apple is, it shows no sign of slowing, not with the Verizon iPhone launching in 2Q11 and China growth accelerating to 400% year-over-year.”

Piper Jaffray analyst Gene Munster raised his price target to $483 from $438, observing in a research note that this quarter was the first in three years in which Apple issued EPS guidance above Street consensus (10 percent ahead of the Street). “Apple’s vision for itself as a mobile device company has come to fruition,” he said. “[The company] guided the March quarter more aggressively than it typically guides the out quarter relative to the Street. We see this as sign that it is bullish on the prospect of the iPhone at Verizon.”

At Deutsche Bank, Chris Whitmore slapped a price target of $440 on AAPL. “Apple continues to show impressive growth despite its size and is well positioned to benefit from the confluence of three major product cycles, namely: iPad, Macs and iPhone,” he told clients. “These product cycles coupled with greater geographic expansion (Verizon iPhone, iPad 2, iPhone 5, China expansion, Carrier deals) increases our confidence in AAPL’s ability to continue to outperform.”

At Barclays, Ben Reitzes raised his target to $450 from $420 to account for higher unit sales across Apple’s product portfolio. His take on Q1: “This very strong quarterly report left no holes to punch in the fundamental story. We believe the above-consensus revenue and EPS guidance and new products to come bring potential for further upside. We continue to believe the company is in very capable hands with COO Tim Cook and the rest of the team.”

Raising his price target to $450 from $430, Goldman Sachs analyst Bill Shope said essentially the same thing. “While the news of Steve Jobs’ medical leave may continue to add some headwinds to the share price momentum in the near-term, we continue to believe improving underlying fundamentals and the strength of Apple’s overall management team will counter this uncertainty. In addition to the strength of the December quarter and the recent Verizon iPhone release, we believe the next-gen iPad launch and the June iPhone refresh will serve as critical catalysts in the first half of 2011.”

UBS analyst Maynard Um ratcheted his price target up to $465 from $415, predicting what “could be the largest pre-order & sales ever experienced by Verizon Wireless for the iPhone” and continued success for the iPad. Said Um, “Though there has been increasing concern with regard to ramping competition, we see Apple’s ecosystem and ease of use as offering a more compelling value proposition than its competitors today and expect its tablet market share to more closely match its iPod market share in the mp3 player market rather than its share in the more fragmented smartphone market.”

And, finally, there was Ticonderoga’s Brian White, who took a “F@&k Everything, We’re Doing Five Blades” approach and raised his target price to a staggering $550. That’s about 60 percent higher than the price Apple shares have been trading at recently, a target that if the company were to hit, would value it at $506.6 billion. Said White, “Despite Monday’s news regarding Steve Jobs’s medical leave of absence, we believe it will be difficult to keep Apple’s stock from reaching new highs given the much stronger than expected quarter and outlook reported by the company.”

Bullish, or another word with a lot of the same letters? Hard to say. But as you weigh that question, remember this: This is the 33rd consecutive quarter in which Apple has beaten estimates. And this time it beat them by $2 billion.

“Apple’s stock could face headwinds for several weeks as the media feeds on a yet-to-be-determined mix of speculation and disclosures about Jobs’ future role at Apple,” Oppenheimer analyst Yair Reiner said in a note to clients today. “At the same time, Apple’s investors will theorize and worry about what Jobs’ status will mean for future innovation at Apple. But this worry stage will likely run out of fuel relatively quickly, because convincing evidence of how Jobs’ presence or absence is impacting Apple’s fundamentals won’t present itself for years. Lacking evidence, investors will shortly go back to trading AAPL’s stock based on measurable fundamental performance.”

J.P. Morgan’s Mark Moskowitz was similarly optimistic. “While not knowing the details behind the current medical leave, we point out that Mr. Jobs has demonstrated a great resolve to improve his health previously, emboldened by the attitude and philosophy that helped him lead Apple’s remarkable rise over the past decade,” he writes. “In our view, Mr. Jobs and his team have made Apple become the primal force in shaping consumers’ technology-driven ‘way of life.’ While the competition is increasing in the areas of smartphones and tablets, we do not expect Apple’s technology and user experience leadership to fade.”

PREVIOUSLY

• Steve Jobs’s Finest Product–Apple–Won’t Break Down
• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

Boomtown was in the front row when game exec Dan Rosensweig left the stage at Guitar Hero to take over as CEO of Chegg, the Web’s top textbook renter. Rosensweig had only been strumming along at Guitar Hero since March, so the move was unexpected. Kara did the full-disclosure dance with AOL’s earnings report. Hit her post for all sorts of great source documents from the new republic of Aol. (AOL). She closed out the week with a thinky piece on Facebook and what it could do in the news aggregation biz. With nigh 400 million users, the number of traded links just to Rick Astley music must be staggering. This one is worth the read.

From deep in his snow-covered technology bunker, Walt let fly a Personal Technology column on two tiny new laptops with a lot to offer. Dell’s (DELL) M11x, the latest release from its Alienware line, is a move to pack lots of power into a tiny package. Sony’s (SNE) Vaio X on the other hand, is all about the lightness. The Dell got high marks for performance, even if the battery life wasn’t as killer as the graphics. The Sony, however, received a rare Mossberg superlative. Being the lightest laptop Walt has ever tested does come with some drawbacks, of course. Chief among them was measly battery life. Mossberg’s Mailbox was short but potent this week. Walt gave some quick clarification to an iPad question and reassured readers that YouTube will be available on the device, even if Flash won’t. He then gave some no-nonsense advice about dumping the older IE6 in favor of a newer, safer, and more supported browser. Katie got to do a little online shopping this week in her review of Flit.com, a Web service that allows you to search multiple stores at once and aims to streamline the shopping experience. She liked the novel way Flit deals you out to store’s Web sites but lets you see their offerings before you click over. No word on if whether or not she bought those black heels she was looking for.

John brought some great news to Google Nexus One users with a post early this week about a meaty software upgrade. Just like that, Google (GOOG) flipped the switch on multitouch functionality in the device. We can now add pinch-zoom to the list of Googleable words. It seems that 12 percent of Americans had something in common with Monster.com (MWW) this week; they were both looking for job listings. Monster purchased Yahoo’s HotJobs for $225 million cash. We drove by earlier today, and Carol Bartz still has Yahoo (YHOO) Games and Yahoo Shopping out on the lawn next to the “for sale” sign. John rounded out the week with a little crystal ball-gazing about the future of Apple and TV. The speculation is centered around Apple’s (AAPL) recent moves in the TV space and how the iPad might play a role. We can add TV to the list of things the iPad might be.

MediaMemo always gets to cover those wonderfully chewy stories where the tech sector and the mediascape bump and grind. This week Peter opened up with a post about YouTube’s most recent foray into legitimate movies. The Google-owned video giant offered up paid views of Sundance films and considered the effort an overall success. One of the big what-ifs of 2009 was actually more of a “when,” as in, “when will Hulu start costing money?” Peter reported that a Disney (DIS) exec said the decision hasn’t yet been made. Weekend Update will be stocking up on old episodes of “The A-Team” and “Another World” in case Hulu finally puts up the wall. Peter rounded out the week with the answer to a question that’s been on our minds for some time now; will we live in a world with a publicly traded porn Web site. When investors didn’t seem to be hot for FriendFinder Networks, the company canceled its pending IPO. Weekend Update supposes that porn will just have to remain the Web’s biggest nonindustry.

Put on your rain slickers or snow shoes, depending on where you live, and enjoy the winter weekend. Or, you could stay indoors and play some Guitar Hero, futz with a new laptop, hunt for a job, shop for some shoes online and watch TV at Hulu. That’s what we’ve been doing.

A few of these will be what Apple (AAPL) refers to as “significant stores,” outlets that are striking in both appearance and location. With its 45-foot tall stone walls, vast glass ceiling and beacon that some say is “brighter than anything on Broadway,” the Upper West Side store certainly qualifies as that–as does Apple’s newly opened store at the Louvre in Paris.

Given their architecture and locales, these “significant stores” come with some equally significant expenses. But evidently, they’re worth it. According to Ron Johnson, Apple’s senior vice president of retail, annual revenue per store is now around $26 million. Altogether, Apple’s stores posted revenue of $1.87 billion in the September quarter, nine percent more than last year and their highest level ever.

[Image Credit: Matt Buchanan/Gizmodo, Flickr]

Judging by Orange’s first-day sales, the debut was quite a success. The iPhone went on sale at 7 am Tuesday and by 4 pm, Orange had sold more than 30,000. Not bad. In fact, according to Orange, it’s a new record. Said a spokesperson for the carrier: “Orange is delighted to reveal, that as of 4 PM yesterday, it…sold more than 30,000 iPhones across the UK–smashing what we believe is the previously published first-day sales record for a handset in the UK.”

Orange also claims to have registered roughly 250,000 iPhone presubscriptions, of which only a fraction have been fulfilled. If that is the case, the carrier will end up with a million iPhone users by the end of 2010.

“We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in.”

Palm CEO Ed Colligan, December 2006

“Five hundred dollars? Fully subsidized? With a plan? I said that’s the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good e-mail machine.”

– Microsoft CEO Steve Ballmer, January 2007

At 37.9 percent, Nokia’s share of the global handset market is the largest in the industry. Odd then to learn that it is not the most profitable. And odder still to learn that that honor belongs to Apple, which has been in the handset market for just two years.

According to Strategy Analytics, Apple’s third-quarter iPhone operating profit was $1.6 billion, while Nokia’s was $1.1 billion. Driving Apple’s profits: Strong sales, high wholesale prices and tight cost controls.

“We have identified at least 4 key factors underlying Apple’s success,” Strategy Analytics analyst Alexander Spektor explains. “First, Apple created a simple sub-brand–the iPhone–which was memorable and easy to remember. Second, the firm developed an attractive family of models with standout usability that enabled Apple to charge way-above-average prices to operators and consumers. Third, Apple distributed and co-marketed its handsets through top-tier carriers in numerous high-value countries. And fourth, the vendor has kept a solid grip on production costs by working with Foxconn, the world’s largest contract handset manufacturer.”

Quite an achievement for Apple (AAPL) and a major humiliation for Nokia (NOK), which has seen its dominance eroded by the likes of Apple and Research in Motion (RIMM), and not just in North America, but in Europe. Indeed, in its latest quarter Nokia’s smart-phone market share dropped by six points.

As Strategy Analytics analyst Neil Mawston noted at the time, “[Nokia has] no iPhone killer to drive a major revival in its smartphone volumes. [It] is still struggling in the U.S. smartphone market, and with competition intensifying in China as well, Nokia’s battles can only get tougher in 2010.”

All of the new commercials are Christmas-themed and all feature Apple’s (AAPL) iPhone, though they are careful to leave it unscathed by Verizon’s criticism of AT&T (T). The standout among the three, this re-creation of the “Island of Misfit Toys” scene from the 1964 Rankin/Bass stop-motion animated Christmas television special, “Rudolph the Red-Nosed Reindeer.” Note that the conceit of the ad is that iPhone has been banished to the Island of Misfit Toys not because of its quality but because of of AT&T’s 3G network.

A pretty brilliant escalation of Verizon’s marketing battle with AT&T and one that suggests through its deference to the iPhone that there may be more to these Verizon iPhone rumors than previously thought.

Below, Verizon’s other two ads.

“Demand for converged mobile devices has remained strong all year,” said IDC analyst Ramon Llamas. Driving that demand: Nokia (NOK), which maintained its position as the overall leader in the converged mobile device market, Research In Motion (RIMM), whose BlackBerry made some significant share gains internationally, and Apple (AAPL) and the iPhone, whose share of the smart-phone market rose to 17.1 percent from 16.6 percent in the previous quarter (see table below; click to enlarge).

“Apple reached its highest volume yet in a single quarter,” Llamas said. “The nearly global availability of the iPhone 3GS sparked another round of annual replacements for Apple loyalists, while the lower price on the iPhone 3G put the device well within reach of customers wary of the price. Although the iPhone has struggled within emerging markets, its arrival at China Unicom this year could foreshadow greater shipment volumes.”

[Image credit: AMUSEMENT]

That’s nowhere near the one million iPhone 3Gs Apple (AAPL) sold in the first three days of the device’s launch in 2008. Nor is it the 13,500-a-day Apple sold during the first 74 days of the original iPhone’s debut. Disappointing to say the least — even if there are already an estimated 1.5 million to two million gray-market iPhones in use in China.

“We view the 5k units as soft,” Piper Jaffray analyst Gene Munster said in a note to clients this morning. “Using the Jun-07 U.S. launch as a comparison we would have expected about 30k units….We originally thought China would contribute about 1-2m iPhones to our 36m unit estimate for 2010. The launch runrate of about 1,500 units per day would suggest 550k units per year.”

Nonetheless, Munster is maintaining expectations. “We are maintaining our overall numbers,” the analyst notes, “despite the soft China launch based on our belief that other wild cards remain for upside to our iPhone units in CY10 including the rollout to new carriers. We believe that eventually China will emerge as a major market for iPhone sales but it could take a year or two to gain meaningful unit traction as it did in the U.S.”

[Image credit: Mobile163.com]

According to its 10-K, the company “anticipates utilizing approximately $1.9 billion for capital asset purchases during 2010, including approximately $400 million for Retail facilities and approximately $1.5 billion for corporate facilities, infrastructure, and product tooling and manufacturing process equipment.”

That’s a wide range of potential applications–wider, in fact, than it has been in years past, as Caris & Company analyst Robert Cihra notes. “Interestingly…this year’s 10K added wording for purchases of ‘product tooling and manufacturing process equipment’ which could imply Apple reversing course to actually build certain products/components in-house,” Cihra said in a note to clients today. “Beyond that are signals of Apple investing in massive new data center capacity (e.g., North Carolina) that could support anything from iTunes/iPhone Apps through new ‘cloud computing.’”

Sounds plausible. After all, there’s a lot a company like Apple could do with an additional $1.9 billion in capital expenditures. Certainly, an iTunes TV subscription service would require some investment. A tablet/slate device might as well. Whether that’s where this money is headed–if it’s headed anywhere at all–remains to be seen. Who knows, perhaps Apple intends to blow it all on CEO Steve Jobs’ dream of the “ultimate computer factory.”

In any event, those higher prices and the device’s lack of built-in Wi-Fi don’t seem to be as much of a barrier as you might think. And if those issues do end up tempering sales a bit, well, perhaps China Unicom can make them up by poaching iPhone users from rival China Mobile. As iPhonAsia’s Dan Butterfield reported earlier this week, China Unicom is offering an amnesty to users of gray-market iPhones.

“This amnesty program is designed to entice some 1.5 million grey-market iPhone owners in China to sign a contract and pop in a Unicom 3G sim card to take advantage of WCDMA 3G speeds and a variety of new ‘Wo’ 3G services,” Butterfield writes. “The ‘upgrade to 3G’ program is no doubt aimed squarely at the approximate 1,000,000+ iPhones now running on China Mobile’s EDGE 2G network.”

[Image credit: CCID]

“As we’ve said before, newer versions of Apple’s iTunes software may no longer provide syncing functionality with unsupported digital media players.”

When Apple said it does not support iTunes integration with third-party digital media players, it meant it.

With iTunes 9.0.2, Apple (AAPL) has once again disabled the Palm Pre’s ability to synch with the media software, a feature re-enabled by Palm (PALM) earlier this month after Apple disabled it in response to Palm’s re-enabling of it following its first disabling by Apple.  

And if you think that round-and-round sounds asinine, just wait until Palm releases webOS 1.2.2.

Apple TV 3.0 is largely as rumored: Adding support for Internet radio, Genius Mixes, iTunes LP and iTunes Extras (bonus clips, interviews, etc.). But it boasts another new feature as well: A redesigned user interface.

Whether the debut of Apple TV 3.0 heralds a hardware refresh of the device itself is anyone’s guess. It is worth noting, though, that there’s been quite a bit of speculation recently that Cupertino is working on an overhauled device that will offer DVR capabilities and support iTunes TV show subscriptions.

As Piper Jaffray analyst Gene Munster wrote back in August: “Apple could leverage its deep library of content with many network and cable channel content owners to provide unlimited access to a sub-library of its TV shows for a standard monthly fee ($30 or $40 per month).”

According to Munster, “Such a product would effectively replace a consumer’s monthly cable bill (~$85/month) and offer access to current and older episodes of select shows on select channels. The selection would dictate the value, and several tiers could be offered, but we see this as one way for Apple to leverage its large iTunes content library as well as its unique Apple TV hardware in order to get digital video to the TV for a price significantly less than the average cable or satellite TV bill.”

Sounds sweet, right? And it would be sweeter still if it were to offer App Store support and allow users to control games and other apps via iPhone or iPod touch …

Below, the official Apple (AAPL) release:

Apple Introduces Apple TV 3.0 Software With Redesigned User Interface

Enjoy iTunes Extras, iTunes LP & Genius Mixes on Your HD TV

CUPERTINO, Calif., Oct. 29 — Apple® today introduced new Apple TV® 3.0 software featuring a redesigned main menu that makes navigating your favorite content simpler and faster, and makes enjoying the largest selection of on-demand HD movie rentals and purchases, HD TV shows, music and podcasts from the iTunes® Store even better on your TV. You can now enjoy iTunes Extras and iTunes LP in stunning fullscreen with your Apple TV, as well as listen to Genius Mixes and Internet radio through your home theater system. The new Apple TV software is available immediately free of charge to existing Apple TV owners, and Apple TV with 160GB capacity is available for just $229.

“The new software for Apple TV features a simpler and faster interface that gives you instant access to your favorite content,” said Eddy Cue, Apple’s vice president of Internet Services. “HD movies and HD TV shows from iTunes have been a huge hit with Apple TV customers, and with Apple TV 3.0 they get great new features including iTunes Extras, Genius Mixes and Internet radio.”

The redesigned main menu on Apple TV gives you instant access to your favorite content. Recently rented or purchased movies, as well as other content including TV shows, music, podcasts, photos and YouTube, are accessible directly from the new main menu. The new software also allows Apple TV users to enjoy stunning fullscreen iTunes Extras and iTunes LP, including great new movie titles such as “Star Trek” or classics like “The Wizard of Oz” and albums such as Taylor Swift’s “Fearless (Platinum Edition)” and Jack Johnson’s “En Concert.” iTunes Extras gives movie fans great additional content such as deleted scenes, interviews and interactive galleries. iTunes LP is the next evolution of the music album, delivering a rich, immersive experience for select albums on the iTunes Store by combining beautiful design with expanded visual features like live performance videos, lyrics, artwork, liner notes, interviews, photos, album credits and more.

Now Apple TV users can enjoy Genius Mixes through their home theater system and listen to up to 12 endless mixes of songs that go great together, automatically generated from their iTunes library. Customers can also enjoy Internet radio, allowing them to browse and listen to thousands of Internet radio stations, as well as tag favorite stations to listen to later. Apple TV’s support of HD photos is enhanced with iPhoto Events, which simplifies finding your favorite photos on Apple TV, as well as iPhoto® Faces, which gives access to photos organized by people identified in iPhoto.

Apple TV users have direct access to a catalog of over 8,000 Hollywood films on iTunes including over 2,000 in stunning HD video available for rent or purchase. Users can also choose from a selection of 11 million songs, 10,000 music videos and over 50,000 TV episodes to purchase directly from their Apple TV or browse and enjoy the iTunes Store podcast directory of over 175,000 free video and audio podcasts. Purchases downloaded to Apple TV are automatically synced back to iTunes on the user’s computer for enjoyment on their Mac® or PC or all current generation iPods or iPhones.* iPod touch® or iPhone® users can download the free Remote app from the App Store to control their Apple TV with a simple tap or flick of the finger.

“This is a decision that is exclusively in Apple’s court,” said Seidenberg. “Obviously we would be interested if they thought it would make sense for them to have us as a partner. And so we will leave it with them on that score….We want to broaden the base of choice for customers, and hopefully along the way, Apple, as well as others, will decide to jump on the bandwagon.”

Pretty damn badly.

Posting third-quarter earnings that topped Wall Street expectations this morning, AT&T (T) said it activated a record 3.2 million iPhones during the period (not surprising given Apple’s blowout quarter).

Of those, 40 percent were for customers new to the carrier. That’s quite a bit more than Wall Street expected, and this surge did much to balance continued weakness in AT&T’s wireline business (click on slide below to enlarge). In fact, if that 40 percent metric is accurate, then Apple’s (AAPL) iPhone single-handedly generated an astonishing 92 percent of AT&T’s post-paid subscriber growth.

“We delivered a terrific wireless quarter, IP data growth was strong and execution across the business continues to be solid,” AT&T CEO Randall Stephenson said in an earnings release, and indeed, that would seem to be the case.

Wireless data-services revenue spiked 34 percent. And revenue from the wireless segment overall increased 8.2 percent as profit grew 41 percent. Wireless turnover rate fell to a record low of 1.4 percent.

Meanwhile, wireline revenue fell 7.1 percent, profit 30 percent.

So in the end, AT&T posted earnings of $3.2 billion, or 54 cents a share, down from $3.23 billion, or 55 cents a share, a year earlier. Revenue slipped 1.6 percent to $30.86 billion. Analysts polled by Thomson Reuters expected per-share earnings of 50 cents on revenue of $30.88 billion.

At $26.86, shares of AT&T are up about 3.5 percent in early morning trading.

Pretty damn badly.

Posting third-quarter earnings that topped Wall Street expectations this morning, AT&T (T) said it activated a record 3.2 million iPhones during the period (not surprising given Apple’s blowout quarter).

Of those, 40 percent were for customers new to the carrier. That’s quite a bit more than Wall Street expected, and this surge did much to balance continued weakness in AT&T’s wireline business (click on slide below to enlarge). In fact, if that 40 percent metric is accurate, then Apple’s (AAPL) iPhone single-handedly generated an astonishing 92 percent of AT&T’s post-paid subscriber growth.

“We delivered a terrific wireless quarter, IP data growth was strong and execution across the business continues to be solid,” AT&T CEO Randall Stephenson said in an earnings release, and indeed, that would seem to be the case.

Wireless data-services revenue spiked 34 percent. And revenue from the wireless segment overall increased 8.2 percent as profit grew 41 percent. Wireless turnover rate fell to a record low of 1.4 percent.

Meanwhile, wireline revenue fell 7.1 percent, profit 30 percent.

So in the end, AT&T posted earnings of $3.2 billion, or 54 cents a share, down from $3.23 billion, or 55 cents a share, a year earlier. Revenue slipped 1.6 percent to $30.86 billion. Analysts polled by Thomson Reuters expected per-share earnings of 50 cents on revenue of $30.88 billion.

At $26.86, shares of AT&T are up about 3.5 percent in early morning trading.

Now, that figure includes sales made abroad, so we don’t yet know how many were sold by AT&T (T), but it’s clear that the number was substantial. In its third quarter last year, AT&T activated 2.4 million iPhones and 40 percent of those were for subscribers who switched from other carriers. So the fact that Apple (AAPL) sold as many iPhones as it did in the company’s most recent quarter, bodes well for the carrier.

As Craig Moffett over at Bernstein Research notes, “It is entirely conceivable that AT&T’s iPhone alone will account for more than 100 percent of the entire industry’s post-paid subscriber growth in the third quarter.”

But therein lies the rub. For while sales of Apple’s handset remain strong, the heavy subsidies it requires have pushed AT&T’s wireless margins down. And the heavy data traffic associated with the handset have led to widespread complaints about AT&T’s network, forcing infrastructure upgrades. Worse, AT&T’s dependence on iPhone exclusivity at a time when Apple is clearly transitioning away from such a model leaves it quite vulnerable.

“While the strong sales of the iPhone are positive for AT&T in the near term, they increase the company’s reliance on a product for which we do not believe it will be able to maintain exclusivity,” Pali Research analyst Walter Piecyk wrote in a note to clients Tuesday. “We believe more than one third of AT&T’s post paid customer base is tied to an iPhone user and that mix is likely to rise significantly over the next few quarters.”

But not this quarter. This quarter, AT&T is expected to add 1.5 million to 1.7 million net wireless customers, driven by demand for the iPhone 3GS, which was released early on in the quarter. And while another drop in wireline customers is likely to weigh on results, it will be tempered once again by the iPhone. AT&T is expected to earn 50 cents a share, compared to 55 cents in the year-earlier third quarter, according to analysts polled by Thomson Reuters, who see revenue falling to $30.9 billion from $31.3 billion.

Now, that figure includes sales made abroad, so we don’t yet know how many were sold by AT&T (T), but it’s clear that the number was substantial. In its third quarter last year, AT&T activated 2.4 million iPhones and 40 percent of those were for subscribers who switched from other carriers. So the fact that Apple (AAPL) sold as many iPhones as it did in the company’s most recent quarter, bodes well for the carrier.

As Craig Moffett over at Bernstein Research notes, “It is entirely conceivable that AT&T’s iPhone alone will account for more than 100 percent of the entire industry’s post-paid subscriber growth in the third quarter.”

But therein lies the rub. For while sales of Apple’s handset remain strong, the heavy subsidies it requires have pushed AT&T’s wireless margins down. And the heavy data traffic associated with the handset have led to widespread complaints about AT&T’s network, forcing infrastructure upgrades. Worse, AT&T’s dependence on iPhone exclusivity at a time when Apple is clearly transitioning away from such a model leaves it quite vulnerable.

“While the strong sales of the iPhone are positive for AT&T in the near term, they increase the company’s reliance on a product for which we do not believe it will be able to maintain exclusivity,” Pali Research analyst Walter Piecyk wrote in a note to clients Tuesday. “We believe more than one third of AT&T’s post paid customer base is tied to an iPhone user and that mix is likely to rise significantly over the next few quarters.”

But not this quarter. This quarter, AT&T is expected to add 1.5 million to 1.7 million net wireless customers, driven by demand for the iPhone 3GS, which was released early on in the quarter. And while another drop in wireline customers is likely to weigh on results, it will be tempered once again by the iPhone. AT&T is expected to earn 50 cents a share, compared to 55 cents in the year-earlier third quarter, according to analysts polled by Thomson Reuters, who see revenue falling to $30.9 billion from $31.3 billion.

“We are very impressed by Apple’s ability to post a record profit quarter during difficult macro spending conditions,” Canaccord Adams analyst Peter Misek said in a note to clients this morning. “A host of new product introductions and continued traction with the iPhone give us confidence in the sustainability of Apple’s operating model.”

Suffice it to say, Misek wasn’t the only the analyst lauding Apple’s (AAPL) fourth-quarter performance. Below a selection of commentary from other Apple watchers:

Gene Munster, Piper Jaffray
“September results were strong despite headwinds of iPhone production constraints and a Mac desktop offering in need of a refresh. We expect these headwinds to become tailwinds in the December quarter, which we believe will be positive for AAPL shares in the coming months.”

Mike Abramsky, RBC Capital Markets
“With strong financial performance and product uptake amidst recession, and further catalysts (iPhone in China, Tablet, refreshed iMacs, iPhone share gains/momentum), we foresee further upside for the shares.”

Maynard Um, UBS
“Upside to virtually every metric in the qtr backs our positive view on Apple. We continue expect greater “recurring” iPhone hardware revenue (growing installed base & stickiness of the App Store), which should drive more visibility into iPhone sales (20%+ of our FY10 iPhone shipments), as well as iPhone expansion driven by new partnerships (& end of exclusivities). Longer term, we believe a service to provide seamless access & mobility of digital content across all products may be the draw (halo) that drives additional future Apple product sales.”

Tavis McCourt, Morgan Keegan
“Overall, Q4:09 was a strong quarter for Apple, as the Mac is nearly becoming the de facto computer for the back-to-school season. Additionally, iPhone trends remain remarkably strong, with unit economics holding up at unheard of levels in the wireless industry.”

Yair Rainer, Oppenheimer
“As usual, Apple appears to be leaving plenty of room for upside surprises to both revenue and margins. On the revenue side, Apple should benefit from continued Mac momentum (particularly in Europe), higher recognized iPhone revenue, and some channel fill for both Mac and iPhone. Gross margin upside is likely to come from a higher proportion of recognized, high-margin iPhone revenue.”

“We are very impressed by Apple’s ability to post a record profit quarter during difficult macro spending conditions,” Canaccord Adams analyst Peter Misek said in a note to clients this morning. “A host of new product introductions and continued traction with the iPhone give us confidence in the sustainability of Apple’s operating model.”

Suffice it to say, Misek wasn’t the only the analyst lauding Apple’s (AAPL) fourth-quarter performance. Below a selection of commentary from other Apple watchers:

Gene Munster, Piper Jaffray
“September results were strong despite headwinds of iPhone production constraints and a Mac desktop offering in need of a refresh. We expect these headwinds to become tailwinds in the December quarter, which we believe will be positive for AAPL shares in the coming months.”

Mike Abramsky, RBC Capital Markets
“With strong financial performance and product uptake amidst recession, and further catalysts (iPhone in China, Tablet, refreshed iMacs, iPhone share gains/momentum), we foresee further upside for the shares.”

Maynard Um, UBS
“Upside to virtually every metric in the qtr backs our positive view on Apple. We continue expect greater “recurring” iPhone hardware revenue (growing installed base & stickiness of the App Store), which should drive more visibility into iPhone sales (20%+ of our FY10 iPhone shipments), as well as iPhone expansion driven by new partnerships (& end of exclusivities). Longer term, we believe a service to provide seamless access & mobility of digital content across all products may be the draw (halo) that drives additional future Apple product sales.”

Tavis McCourt, Morgan Keegan
“Overall, Q4:09 was a strong quarter for Apple, as the Mac is nearly becoming the de facto computer for the back-to-school season. Additionally, iPhone trends remain remarkably strong, with unit economics holding up at unheard of levels in the wireless industry.”

Yair Rainer, Oppenheimer
“As usual, Apple appears to be leaving plenty of room for upside surprises to both revenue and margins. On the revenue side, Apple should benefit from continued Mac momentum (particularly in Europe), higher recognized iPhone revenue, and some channel fill for both Mac and iPhone. Gross margin upside is likely to come from a higher proportion of recognized, high-margin iPhone revenue.”

That’s the argument put forth by Piper Jaffray analyst Chris Larsen in a research note to investors Monday. Larsen feels that the cost to Apple (AAPL) of developing a CDMA version of the iPhone for Verizon’s (VZ) network and the subsidies the company might lose by ending its exclusivity deal with AT&T (T) would be a small price to pay for the spike in iPhone sales they would create.

“Although the iPhone is a strong player in the smartphone market, expanding its multi-vendor strategy could allow it to dominate the industry, as it does with the iPod,” Larsen writes. “The U.S. market is the world’s largest smartphone market, but we believe there is a land grab in the U.S. for smartphone share.”

Expanding his argument, Larson adds, “Apple’s exclusivity with AT&T has left the door open for strong competition from competitors, such as Research In Motion’s Blackberries, Palm’s webOS smartphones and Google’s Android operating system on multiple smartphones from OEMs such as Motorola, HTC, Samsung, LG, and others. Making the iPhone available to the other 150+ million subscribers (~2/3s of subscribers) not on AT&T’s network could result in iPod like adoption.”

Keeping the iPhone exclusive–while it might enable Apple to do more innovative things, as COO Tim Cook noted yesterday during the company’s quarterly earnings call–would also give those rival devices and platforms more time to catch up. If Apple really hopes to keep its lead in the U.S. market, it must do away with exclusivity deals, the same way it’s doing away with them abroad.

That’s bad news for AT&T. Because, as I’ve noted here before, a move to nonexclusivity in the U.S. would brutalize the carrier’s subscriber base. Analysts have long said that a material number of AT&T iPhone users would flock to Verizon’s superior network given the chance.

Larsen agrees. “A move to non-exclusivity in the U.S. could have a material impact on the U.S. wireless carriers,” he writes. “AT&T could lose meaningful smartphone share, while we think all the other carriers would gain share. We believe Verizon would be the largest beneficiary of non-exclusivity and the development of a CDMA iPhone.”

Continuing, Larson explains, “With 35% of AT&T’s iPhone sales coming from new customers, we feel it is reasonable to assume the company’s total iPhone sales could decline by 30% or more and that Verizon could pick up the bulk of this lost share (why switch to AT&T for iPhone if you haven’t left by now and the device is now available through your carrier; Verizon’s network quality could be a reason to switch from AT&T).”

In a note to investors today, Oppenheimer analyst Yair Reiner warned that supply-chain issues may have prevented Apple (AAPL) from selling the seven million iPhones consensus estimates have been predicting. “During the iPod event on Sept. 9…Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter,” Reiner wrote. “Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.”

Apple was able to resolve those issues, but they lasted long enough that Reiner fears consensus estimates implying that the company sold an additional 3.5 million iPhones in the final weeks of the quarter may be a bit too aggressive.

That said, it’s worth noting that Piper Jaffray analyst Gene Munster pointed out the same supply issues in a research note of his own earlier this week and came to a very different conclusion. Munster is calling for iPhone sales of about 7.5 million units in the Sept. quarter.

Who’s right? We’ll find out Monday, when Apple reports earnings.

In a note to investors today, Oppenheimer analyst Yair Reiner warned that supply-chain issues may have prevented Apple (AAPL) from selling the seven million iPhones consensus estimates have been predicting. “During the iPod event on Sept. 9…Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter,” Reiner wrote. “Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.”

Apple was able to resolve those issues, but they lasted long enough that Reiner fears consensus estimates implying that the company sold an additional 3.5 million iPhones in the final weeks of the quarter may be a bit too aggressive.

That said, it’s worth noting that Piper Jaffray analyst Gene Munster pointed out the same supply issues in a research note of his own earlier this week and came to a very different conclusion. Munster is calling for iPhone sales of about 7.5 million units in the Sept. quarter.

Who’s right? We’ll find out Monday, when Apple reports earnings.

This morning the Finnish mobile phone giant tapped Rick Simonson, currently its chief financial officer, as head of its handset division. And the company named Timo Ihamuotila, currently global head of sales, CFO.

While Simonson’s move from CFO to head of Nokia’s mobile phone business might seem a bit odd, analysts say it could be just what the company needs. “Simonson has been in the business for years,” Swedbank Securities analyst Jan Ihrfelt told Forbes. “He knows the company quite well, has the financial skills and the skills of a good communicator to make people in the company excited about new goals.”

And that’s clearly something Nokia (NOK) needs. For while the company is holding its ground in the broader mobile phone business, it’s losing it in smart phones, the fastest-growing segment of the market. As I noted yesterday, Nokia’s share of the smart-phone market slipped to 35 percent from 41 percent in its latest quarter, a grim reminder of just how poorly the company’s flagship smart phones are faring in their battle with iPhone maker Apple (AAPL) and BlackBerry manufacturer Research In Motion (RIMM).

Said Ihrfelt: “Nokia hasn’t been as quick as others in catching up with trends in the market and in bringing phones to consumers. One would expect a player the size of Nokia to have a product that competes with the iPhone, but that hasn’t been the case.”

Not yet, anyway. But that may soon change. A few weeks back, Nokia hired John Martin, former vice president of iPhone and Mac Internet Services at Apple to oversee development of new devices based on its Maemo platform.