Apple iTunes Breaks Sales Records In Q3

Even though iPad sales stumbled in the third quarter, Apple Inc.'s iTunes store continued to rock on, according to the company latest earnings report released Tuesday.

The iTunes store "generated record billings of $4.3 billion in the June quarter, culminating in our best month and best week ever for App store billings at the very end of the quarter," Apple Chief Financial Officer Peter Oppenheimer said in a call with analysts. Those gross billings, which includes money passed through to developers as well as Apple's cut, translated to net quarterly revenue of $2.4 billion for Apple, up 29% from the year ago quarter, Oppenheimer said.

Oppenheimer credited movies, TV shows and apps for the uptick, saying iTunes customers downloaded more than 1 billion TV episodes and 390 million movies to date. They're currently downloading more than 800,000 TV episodes and 350,000 movies every day.

As for the five-year-old App Store, Apple disclosed that developers have created more than 900,000 iOS apps thus far, including 375,000 apps designed specifically for the iPad.

"The popularity of these apps remains incredibly strong," Oppenheimer said in a conference call with analysts to discuss the company's third quarter earnings. "Downloads have surpassed 50 billion. and app developers have made over $11 billion from their sales of the App Store -- half of which was earned in the last four quarters."

The message is clear: For iTunes, the money is shifting towards video and apps, diluting its former reliance on music, as Apple expands its array of digital content offerings. That's not necessarily bad news for the music industry, which has also diversified its product lineup to include apps, games and videos in which music is a primary element.

Apple Chief Executive Tim Cook also presented another spot of good news for the industry. Although iPad sales dropped 14% in the quarter, Cook said he belived both tablets and smart phones have further room to grow, particularly in overseas markets. Both types of mobile devices are key drivers of music and media consumption.

Another potential platform for media consumption is the automobile, which Cook viewed as "part of the ecosystem."

"Having something in the automobile is very, very important," Cook said. "Apple can do it in a unique way, and better than anyone else. It’s a key focus for us." 

When it came to products that Apple may be working on -- whether it's a watch, a new Apple TV or an integration with car manufacturers -- Cook refused to tip his hand, declining to answer analysts' questions on upcoming releases.