In Apple's fiscal third quarter earnings report, it was revealed that Apple had seen no cannibalization of iPod sales due to the iPhone so far. However, the iPhone sales period has been short, and they are watching the situation closely. Apple's long term view of the iPhone strategy was articulated. Absent from the report was information about Apple TV or movie sales.

When asked about iPod cannibalization, Peter Oppenheimer said, "We saw no obvious evidence during the June quarter. We will obviously monitor that this quarter and report this quarter and the October conference call." In fact, iPod sales were 9.8 million, up 21 percent over the same quarter a year ago.

Overall, Apple's music business accounted for 40 percent of their revenue. Based on data from NPD, Apple reported that the iPod retains 71.5 percent of the MP3 player market. Apple also reiterated that they recently surpassed Target and Amazon to become the third largest retailer of music in the U.S.

Regarding the iPhone, during the Q&A period, Mr. Tim Cook was asked about the customer preference for 4GB or 8GB iPhones. "We don't disclose the specifics ... but I would tell you that the mix skewed to the eight gig for early sales in June," Mr. Cook said.

In terms of the hoopla regarding the early iPhone sales, Mr. Cook had some measured words: "And so our view is the starting gun has been fired and we have gotten off to a great start. However, our primary focus is not on initial sales. We're focused on building a third great business for Apple over the long term along side our Mac and iPod businesses. Both of which you can see from the results reported today are doing very well. It won't be easy to build this third business, because the competitors are large and end trenched and it will not be done overnight. Our perspective is measured in years, not months, but the rewards we believe are huge for Apple."

Apple did not report specific sales numbers for the Apple TV nor did they provide additional information about on-line movie sales for the quarter.