IPod jazzes up Apple sales

Apple sold a record 6.61m iPods in three months

Apple's sales have once again exceeded expectations as a result of strong demand for its iPod digital music players.

The manufacturer reported profits of $320m on sales of $3.52bn for its most recent fiscal quarter ending 30 June. In the same period last year Apple earned $61m on revenue of $2.08bn.

Apple's results surpassed not only analysts' expectations, but came in higher than the $3.25bn that the company had previously predicted.

IPod sales grew to 6.16 million units, up 616 per cent year-over-year. Revenues grew by only 343 per cent relative to last year, as the introduction of the low cost iPod Shuffle lowered the average price per unit.

Apple also benefited from a surge in desktop computer sales with the release of the latest version of its OS X Tiger operating system. The company showed a 35 per cent year-over-year sales increase to 1.18 million units.

Apple was cautious in its revenue indications for the forthcoming quarter, projecting $3.5bn in a quarter that includes back-to-school sales.

The continuing sales increase of iPods and Macs points to a renewed interest in the vendor's computers, according to Joe Wilcox, senior research analyst with Jupiter Research.

"It is beginning to look like maybe - just maybe - the halo effect is real, and that the iPod is helping to sell more Macs," he told vnunet.com.

Wilcox noted that the iPod has succeeded in sustaining sales growth after the last holiday shopping season, proving that the device really has reached iconic status similar to the Walkman in the 1980s.

"I do not see an end until this market saturates, and we're a long way from that," said the analyst.

For the coming quarter Wilcox warned that sales for Apple computers could level off as consumers delay buying in anticipation of forthcoming Intel-powered models.

Apple is in the process of switching architectures from PowerPC to Intel's x86 chips. The first new models are scheduled for availability before June 2006.

The vendor has seen sales drop in the past prior to the release of new models, but Wilcox said that the switch to Intel processors is probably not sufficiently significant to justify such a delay this time.