Apple first-quarter profits soar

THE Apple computer company, which employs 1,200 people in Cork, saw first-quarter profits soar after selling a record number of its iPod music players.

The company said profits for the three months to end December 2004 quarter profits rise by $232 million to $295m.

Apple said sales of its iPod players the must-have Christmas present of 2004 iMac and its iTunes soared in the three months, with revenues up 74% to $3.49 billion. "We are thrilled to report the highest quarterly revenue and net income in Apple's history," said company founder and chief executive Steve Jobs.

To date, Apple has sold over 10 million iPods, with 4.5m in the quarter alone. It also shipped just over 1m Macintosh computers and 337,000 iMacs.

It predicts that sales in the second quarter, which ends in March, will rise to $2.9 billion and profit will more than triple to 40 cents a share from 12 cents a year earlier. Analysts surveyed by Thomson Financial had forecast earnings per share of 33 cents on sales of $2.75 billion.

Apple will try to build on the iPod's success by unveiling a lower-priced version of the player, the iPod shuffle, and the least expensive Macintosh in the brand's 21-year history. It will open 24 retail stores this year, bringing the total to 125.

Apple shipped 337,000 iMacs, making the latest version of the consumer computer, released in September, the most popular.

Apple is also betting that a new lower-priced Mac will convince users to switch to Apple from Microsoft's Windows-based PCs.

The Mac mini, which comes without a monitor, keyboard and mouse, starts at $499 and begins shipping this month. The company has sold more than 230 million songs through its iTunes online music store.

Apple is selling 1.25 million songs a day and is likely to sell more than $400 million in music, at 99 cents a song, this year.

The store was "slightly profitable" last quarter, said financial officer Peter Oppenheimer.

"It's not our intention to make a lot of money on the store itself, because we believe that selling music will help us sell iPods, which would help us sell computers."

Shares of Apple rose more than 10% in early trade yesterday on the results. "We believe that Apple can grow its consumer share," said Bank of America securities analyst Keith Bachman, in a note to clients.

"Our survey work indicates strong brand appeal and interest in converting from Windows systems to Macs based on better media capabilities and virus protection."

"Apple is a name in technology that at least for the next couple of quarters will have the wind at its back," said Owen Fitzpatrick, head of the US Equity Group for Deutsche Bank Private Wealth Management.