Apple hooked on iPhone

The computer giant has really become more of a phone giant. When Apple reported its quarterly earnings on Monday, it also came out with historical results that were revised to account for new accounting rules. Here's the upshot: The iPhone generates more revenue than any other Apple product - including desktop and portable computers - combined. What's more, Apple's profit margins have jumped over the last three years to 41 percent from 31 percent. From WSJ's Heard on the Street:

Being this dependent on one device has a downside, of course, exaggerating the impact if there is any slowdown in sales. There has to be a chance of that, given intensifying competition in the smart-phone space as companies like Google wade in. But there is also plenty of room for growth if Apple continues to out-innovate its peers. The mobile-device market this year is expected to hit 1.32 billion units, estimates Gartner. Apple has sold only 42.4 million iPhones since 2007.

Meanwhile, tomorrow is the much-awaited unveiling of the Apple tablet. This will be the biggest product launch since.... well, the iPhone. From MarketWatch:

Gene Munster, an analyst with Piper Jaffray, says it is a virtual certainty that Apple will unveil a tablet device at Wednesday's event, and that it will come with a price tag between $600 and $800. Such a price point would place in between the company's iPod touch and iPhones and the lowest end of its MacBook line of laptop computers. In a note to clients Tuesday, Munster said pricing may remain high and it could take some time for consumers to get the tablet concept before the device becomes a meaningful contributor to Apple's bottom line. Munster said it is most likely that 2011 will be the year that Apple's tablet sales begin to ramp up in earnest. "Pricing and the use-case for the expected device seem to be the two critical questions that will be on the minds of investors during the event," wrote Munster, who holds an overweight rating and $279-a-share price target on Apple's stock.