And then Peter, the other question revolves around the OpEx ratio going forward. You''ve talked in your prepared remarks about 2010, the new product pipeline. Can you give us any sense in terms of how should investors think about the R&D or SG&A moving up? Is it going to kind of hold steady or will there be any sort of changes regarding that pipeline?
Peter Oppenheimer
I don''t want to give a specific quantitative percent. I think over the last year, we have managed operating expenses well, but we have been investing confidently for our future, especially in engineering and our distribution and our marketing and advertising. We saw the benefits in the last downturn in 2001 and 2002, of coming out of that with just an amazingly strong product pipeline and we''re repeating that very positive lesson this time around. So, I think we''re being careful with money. We''re making good choices and -- but continuing to invest wisely and confidently in our future.
Mark Moskowitz - JPMorgan
Thank you.
Nancy Paxton
Thank you, Mark. Could we have the next question, please?
Operator
Your next question will come from Toni Sacconaghi with Sanford Bernstein.
Toni Sacconaghi - Sanford Bernstein
Yes, thank you. Couple of questions, please. You had very strong ASP performance in both Macs and iPhones. On the Mac side, you''re typically down because of the back-to-school promotion because of ASPs. You were up even on the notebook side this quarter. Can you comment on that? And on the iPhone side it, does look like your ASP went up $40 or $50 sequentially on a cash basis. You had stated last quarter that 3GS was outstripping the $99 phone, so was it mix alone or is it something else around currency translation or something else that is affecting that?
Peter Oppenheimer
Hi, Toni. It''s Peter. Let me start with iPhone. The iPhone ASP in the quarter was just over $600 and this reflected both a high mix of the 3GS sell through, and also the benefit of rebalancing the ending channel inventory more towards the 3GS as a result of the introduction.
On a sequential basis, yes, our ASPs were up a bit in the portable space. This was really a function of our seeing a higher mix of our new MacBook Pros. As Tim commented, very, very strong quarter after the June introduction, we had the best back-to-school season that we have ever had. And on a sequential basis, we also got a little benefit from the dollar as well. On a year-over-year basis, the dollar was a negative. But sequentially, it was a small positive.
Toni Sacconaghi - Sanford Bernstein
Okay. And then on the availability issues that you had on the phone, was that a good old fashioned demand exceeds supply issue or were there any component availability issues that constrained your supply and related to that you had also mentioned that air freight, you expected to go up next quarter as a reason for gross margins. I''m not sure if that was in relation to phones or anything else, but perhaps you can address that as well.
Tim Cook
On the availability portion, Toni, the iPhone 3GS demand outstripped the supply of the iPhone 3GS, and so I think you would probably put that in your first category of a good old fashioned, a demand issue, which is a nice problem to have in the scheme of things. Now, because we, because it was outstripping supply, it creates component shortages as we go out to the market to secure more components and generally speaking, the ones that are hardest to get is silicon, and so it takes a little longer.
However, I was really happy that we were able to solve the bulk of these, the vast majority of them in September or in early October. So, I feel good about how we''re positioned now. The air freight is not related to the iPhone. So, these are unrelated topics. But generally speaking, the air freight is planned to get enough units into the channel in time for the holidays and is necessary for that reason.
Toni Sacconaghi - Sanford Bernstein
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