Apple profits jump on iPod demand
 

Apple Computer has reported a 50% jump in fourth-quarter profits, driven by demand for its iPod music player.
Profits in the three months ending 25 September were $106m (£59m), from $44m a year ago while sales totalled $2.4bn, the highest level for nine years.

Apple said it sold more than two million iPods, compared with 860,000 in the previous quarter.

Calling the figures "terrific", the company said earnings in the current quarter are likely to top forecasts.



'Halo' effect

The iPod has had a dramatic effect on Apple's bottom line.

It is the most popular digital music player in the world, with more than 50% of the digital music player market.

But it is facing growing competition from the likes of Sony, Creative and Rio, who are all seeking to tap into the popularity of digital music players.

Apple said it was benefiting from a "halo effect", whereby customers who are attracted to the iPod then buy other products.

"It was a terrific quarter on every level," Steve Jobs, Apple's chairman, chief executive and co-founder told Reuters.

Chief financial officer Peter Oppenheimer said the jump in fourth-quarter earnings was also due to rising sales of Apple computers such as the iBook, Powerbook and iMac.

It hinted that profit may have been better had it not been for supply problems that affected shipments of its new G5 microchip.

Computers normally have higher profit margins than other products, analysts said, and smoother chip shipments would have boosted computer sales and thus profits.

Supply glitches now appear to have been ironed out.

As a result, the company shipped more computers that use the faster G5 processor in September than it did in July and August, Tim Cook, Apple's head of worldside sales and operations, said.

"That has given us confidence that this quarter will be materially better" than the previous one, Mr Cook said.



http://news.bbc.co.uk/1/hi/business/3741624.stm