Apple reported a stronger-than-expected 26 percent rise in quarterly profit, driven by strong sales of its new iPhone, and sent its shares up 10 percent on Tuesday.

Apple shipped 6.89 million iPhones in the September quarter, the first since it released a faster, next-generation model. Mac shipments increased 21 percent from last year to 2.61 million, while iPod shipments rose 8 percent.

"They posted very positive iPhone results, higher than people were expecting, but the concern is for guidance on the December quarter," said Shelby Seyrafi, analyst with Calyon Securities.

Company executives said Apple was not sure how the economic downturn would affect it, but emphasized its product line-up was strong and its balance sheet solid.

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