Once again, Appleis CFO Peter Oppenheimer and COO Tim Cook handled the Apple earnings report. While Apple didnit shock anyone with unexpected results, the core business is exhibiting some interesting trends.

Apple continues to accrue cash at an amazing rate. For Q1 Apple added about US$3B and finished with $18.4B in cash. When asked about a stock buy back, Mr. Oppenheimer continued to insist that, while thatis discussed at board meetings, the major usage of that money is expected for acquisitions.

Apple continues to sell Macs at a rate of growth that is 2.5 times the PC market as a whole. This has been happening for some time, contributes to the market share gains, and will likely soon become an irresistible topic, especially as the Mac market share moves into the mid double digit range. Things will start to change at that point in terms of developer and business awareness of opportunities.

While Tigeris revenue in its first quarter was merely US$100M, Leopardis was $170M. That was praised by Appleis Tim Cook, but it also reflects a considerable increase in Apple market share since April 2005.

Both Mr. Oppenheimer and Mr. Cook repeatedly mentioned that while iPod sales year over year for Q1 hadnit risen substantially, the Average Selling Price (ASP) has. Thatis because Apple has made a strategic move to make the iPod touch a "mainstream mobile Wi-Fi platform." They admitted that there may have been some loss in volume due to the touchis higher price, but the enormous sales of the touch proved that Appleis strategy, for the long term, has paid off. This gives some indication where Apple is going, and the days of the simple minded, dedicated MP3 player may be numbered.

Mike Abramsky at RBC asked about the disconnect between 2.3M iPhones sold in the December quarter and Mr. Jobs announcement at Macworld of 4.0M iPhones sold to date. However, when one includes the 1.3M iPhones sold in Q4, that brings the total to 3.7M for the previous two quarters. The 4.0M number, as of the Macworld keynote on January 15th, bodes well. Apple continues to believe they will sell 10M iPhones in 2008 and plans to add additional European countries in addition to their entry into Asia.

Appleis deferred revenue, in its 24-month subscription accounting for the iPhone, has jumped from US$600M in Q4 to $1.44B in Q1. Those who see the iPhone as an ongoing money machine and revenue generator were on the mark.

Apple currently has 9,500 retail outlets for the Mac, up from 7,700 a year ago. Mr. Cook characterized the Mac sales as exploding and pointed out that they plan to expand their Mac sales presence in Best Buy stores from 286 to 600 stores in the next six months. There was some concern expressed by Tony Sacconaghi of Sanford Bernstein about whether the retail stores other than Apple are seeing the same retail growth as Appleis own stores, and Tim Cook couldnit shed any light on the numbers.

Gene Munster with Piper Jaffray asked about Appleis reference to the Apple TV as a hobby and what it will take to "move the needle." Tim Cook responded,"You know, as Steve covered at Macworld, many companies have tried in the space and missed. Weire back with Apple TV take two, with movie rentals directly from iTunes and we think we have it right this time. So weill see."

Finally, Mr. Cook divulged that there are, currently, considerably more iPhone retail outlets in Europe (2,500) than the U.S. (2,000-2,100, AT&T and Apple). That was a number that leaped off the page, so to speak.

The overall tenor of the earnings report was that while the general U.S. economy is a subject for others to discuss, Apple is taking care of its own business. As demand for Apple products rises, Apple creates new outlets, and those outlets, in turn are fueling growth. Apple is confident that its strategy and business model are on a sound foundation.

At closing, AAPL was down US$5.72