iPods are still dominating the portable media player market. More than 8.5 million units were shipped during the second quarter, up 61 percent from the year-ago period, the company said.

Cumulatively, Apple has now sold more than 50 million iPods since its original debut in 2001.

IPod sales totaled $1.7 billion - more than the $1.57 billion in Mac sales - in the quarter, accounting for 39 percent of the company`s total revenue.

``We`re thrilled about the quarter,`` Oppenheimer said in a phone interview. ``It`s the second best revenue quarter we`ve ever had, topped only by last quarter.``

Analyst Shaw Wu of American Technology Research noted some investors were also likely pleased that Apple`s gross margin, or the percentage of sales left after manufacturing costs, was 29.8 percent for the quarter, equal to the year-ago period.

Given the price slashes of certain iPod models and the new transition to Intel-based Macs, Wu - as well as Apple itself - had earlier predicted that gross margins would fall.

Oppenheimer said a driver behind the gross-margin surprise was cost-savings Apple achieved in flash memory - a key component for iPod players like the Nano.

``That really shows you the strength of Apple,`` Wu said. ``Only a leader could cut a deal that favorable on such a large scale.``

For the third fiscal quarter, Apple forecast that revenue will land between $4.2 billion and $4.4 billion, and earnings per share, including an estimated 4 cents per share of stock option expenses, will be about 39 cents to 43 cents. Analysts were targeting revenues of $4.73 billion and earnings of 47 cents per share.