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Apple Inc.'s shares surpassed $700 Tuesday, the day after record first-day orders for the latest iPhone fueled optimism that the company will keep generating the revenue growth that transformed it from a niche computer manufacturer into the world's most valuable business.

Shares climbed about 1 percent, to $701.91, at the close in New York, for a market capitalization of $658 billion. The stock has advanced 73 percent this year.

The iPhone 5, which features a bigger screen, faster chip and a lighter body, sold 2 million units in first-day orders, more than double a record set by the previous model, Apple said. Since its 2007 debut, the device has become Apple's top-selling product, accounting for about two-thirds of profit.

Signs of robust demand reinforced expectations that Apple will withstand accelerating competition from Samsung Electronics Co. and Google Inc. in the $219.1 billion smartphone market.

"It leaves me in awe," said Rex Ishibashi, CEO of Callaway Digital Arts Inc., which develops games for the iPhone. "It's reflective of how important these devices and these digital technologies have become in our lives."

Apple's surge gathered steam Sept. 14, after it began taking pre-orders for iPhone 5, most of which will be delivered Friday. Apple's website said later orders wouldn't ship until Sept. 28, a week after the handset is due in stores, an indication that supply will run thin.

"The initial batch is sold out," said Shaw Wu, an analyst at Sterne Agee & Leach Inc.,. He raised his sales estimate for the quarter ending in September to 26 million units, from 23 million. "We think that could turn out to be conservative."

Apple surpassed Exxon Mobil Corp. to become the biggest company in the world by market capitalization last year after overtaking Microsoft Corp. as the most valuable technology provider in 2010. Before his death in October, co-founder Steve Jobs mastered a strategy of pushing Apple beyond its core business of selling computers into new markets, including digital music and mobile phones. Each new family of products helped the company boost revenue, while inducing investors to snap up more shares.

Revenue increased to $35 billion in the June quarter from $1.73 billion in the last quarter before Jobs returned to Apple in 1997. Apple's shares crossed the $600 threshold this past July, after passing $500 in February and $400 last year.

Sales of iPhones last quarter alone reached $16.2 billion, 33 percent higher than Google Inc.'s total revenue and almost as much as Microsoft Corp.'s $18.1 billion.

As many as 58 million units of the iPhone 5 may sell by the end of the year, according the average estimate of analysts surveyed by Bloomberg. That could generate as much as $36.2 billion in sales for Apple.

Apple has grown adept at keeping existing customers and drawing new ones through incremental improvements to the hardware and software of its products, while also cultivating a developer community that cranks out thousands of applications for use on the company's phones and computers.

The company's shares are also getting a boost from a legal victory in August, when a jury said Samsung copied the iPhone. The outcome of the California trial may result in a huge payment to Apple and a ban on certain Samsung phones in the U.S. It also ratchets up pressure on Apple competitors to make their products less like the iPhone and iPad.

Gains in coming months will hinge on the success of future products, such as a smaller version of the iPad tablet, which is expected to be released in October. Apple is also trying to make headway with products that let users view TV shows and movies on Apple devices. Yet the company has struggled to come to terms with communications providers over how products will be crafted, and media companies have been reluctant to cede control over content and customer relationships. —

Colors, prices, dates on iPhone 5

Colors • Black or white.

Models and prices • 16 gigabytes of storage, $199; 32 GB, $299; 64 GB, $399. These prices assume a two-year service agreement.

Older phones • With a two-year contract, the iPhone 4S will now sell for $99 and iPhone 4 will be free.

Dates • Advance orders began last Friday. The iPhone 5 will be available this Friday in the U.S. and eight other countries. On Sept. 28, it will be available in 22 additional countries

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