The financial analysts were wrong about Apple’s results this quarter, many of them predicting that the iPod sales would stall rather than increase. The iPod accounts for roughly a third of Apple’s revenue, so the analysts were predicting a very sober set of results.

As it happened, Apple’s quarterly results were as intoxicated as the previous quarter. Revenue rose 75 percent to $3.52 billion from $2.01 billion and quarterly profit more than quintupled. Apple’s halo was glowing and its stock rose accordingly.

Apple actually shipped more than 6 million iPods, 1 million more than expected. Sales of Tiger, the new version of Mac OS X pulled $100 million in revenue and sales of computers grew by 35 percent, three times the growth of the PC market. A good deal of this may be “iPod halo”, but I think there’s a fair amount of Windows fatigue in this too.

The prediction by Forbes that Apple will grow its PC market share from 3 percent to 5 percent this year, looks like it will be fulfilled.

Remember that the PC market roughly divides in half between the home and the business and Apple is probably not getting any significant growth in the business market. So we can think of Apple as heading towards a 10 percent share of the home market.

If you are wondering whether Apple’s switch to Intel will put buyers off, the evidence at the moment seems to be: no. Here’s a simple way to take the pulse of the PC market, whenever you feel like it: Go to the computer section of Amazon and click on the top sellers link under the “computers” tab. This will show you Amazon’s list of top selling computers – updated every hour. Apple computers normally occupy half of the top ten slots (at the time of writing they occupy 5 of the top 6). This indicator showed no drop in demand following the Intel announcement. Of course, demand may diminish in the coming months, but I suspect that most buyers don’t care too much about it either way.

According to Tim Cook, Apple’s head of operations, Apple now has 80 percent of the market for downloaded music, with iTunes, and 70 percent of the market for MP3 players with the iPod. This is tantamount to a monopoly position – no it’s not, it is a monopoly position – but it’s not a stable one.

If Apple is to shore up its market dominance it needs to make a strong entry into the mobile phone market. There seems to be a consensus of opinion that music downloads will go mobile and they certainly will if the iPod turns into an iPhone. Apple’s collaboration with Motorola to produce an iPhone has yet to bear fruit, but rumour has it that a device of some kind will appear later this year. Rumour also has it that Apple may set up its own mobile network, by piggybacking on another carrier in the US, such as Cingular and, possibly, partnering with Virgin.

If these developments are in the works, it doesn’t surprise me. They make perfect sense and Apple needs to move as quickly as it can.

Apple stayed with IBM’s PowerPC chip for so long that the idea that it might change horses never occurred to me – although Apple has been flirting with Intel for quite a while, according to Steve Jobs.

Nevertheless the G5 gave Apple strong differentiation. Apple was always faster than the PC opposition. There is no indication, by the way, that the performance lead IBM has with the PowerPC chip is soon to be eroded. Indeed IBM has established a volume market for its chips in the games market primarily because of performance.

In all probability, IBM’s success in the games market had a lot to do with Apple’s switch because the chip volumes in the games market are so much greater. It is likely that IBM was giving Apple a sweet deal in terms of R&D time and price, which it was no longer willing to do – so it became a matter of simple economics. I doubt if there will be too many tears shed at IBM, but it cannot be good news for the genesis of a PowerPC-based Linux PC.

The switch to Intel will have some consequences. Apple will no longer be able to boast of a significant performance lead over Windows PCs and, if it wants to, Apple will be able to sell its popular applications on Windows. That would, however, reduce Apple’s natural differentiation.

Apple guards its differentiation jealously and rightly so. Also it is primarily a hardware company, not a software company. So what I think is going on is that Apple has Dell’s share of the home market in its cross hairs. It cannot touch Dell in the enterprise where it dominates the field with its combination of efficient manufacturing and competitive pricing – but Apple’s enterprise market is almost negligible anyway. The home market is different. There the Apple stores are a distinct advantage over Dell.

There is little doubt in my mind that Apple is intending to sell higher volumes of PCs and laptops at lower prices and the move to Intel (which also puts it in a position to deal with AMD) will help with costs and volume production. Don’t expect to buy Apple Macs at Dell prices – I doubt if it’s economically achievable, but from Steve Jobs’ perspective it’s not desirable either. You should expect to pay a premium for the Apple Mac, but you can expect the premium to diminish.

There is a neat little bit of irony in all this. Just as Apple is moving away from the PowerPC chip, Microsoft is moving to it.