iPhone sales exceed market expectations

Apple's iPhone sales reportedly exceeded the market expectations in the third quarter while the company's margins continued to slide sharply.

According to Stuff.co.nz, Apple said that its profit fell 22 percent as gross margins slipped below 37 percent from more than 42 per cent in the year-ago quarter, however, sold 31.2 million iPhones last quarter, far more than the estimated 26 million and 14.6 million iPads.

Shannon Cross of Cross Research said that the iPhone number should provide some comfort to investors who were worried about smartphone demand and that's one of the reasons the stock is up.

Apple's Chief financial officer Peter Oppenheimer said that iPhone sales rose 51 percent in the United States from a year earlier, and 66 percent in Japan.

The report said that Wall Street's average forecast was for revenue of 35.02billion dollars and Apple has forecasted revenue of 34billion dollars to 37billion dollars this quarter, slightly below Wall Street's average projection of 37.04billion dollars.

Gross margins came in at 36.9 percent in the third quarter, sharply below 42.8 percent a year ago, as Apple sold more of the cheaper older model iPhones along with the new iPhone 5 models, the report added.