The iPod helped Apple's profit get up and dance.
Apple Computer Inc. reported yesterday that profit in its fourth fiscal quarter jumped 140 percent from the comparable quarter last year.
The company said booming sales of its digital music player and laptop computers boosted quarterly profit to $106 million, or 26 cents per share, compared with the $44 million, or 12 cents a share, it earned in last year's fourth quarter.
In a call with analysts yesterday afternoon, Apple Chief Financial Officer Peter Oppenheimer said revenue -- $2.35 billion -- was the most Cupertino, Calif.-based Apple had seen for a fourth fiscal quarter in years. The accounting period ended Sept. 25.
The iPod continues to get more popular, the company said. Apple reported that it sold more than 2 million iPods for the last quarter -- a 500 percent increase over the comparable period in 2003.
But Apple's computers still make up more of the company's bottom line. The iPod brought in $537 million in revenue for the quarter, compared with $1.2 billion in revenue from desktop and laptop computers such as the iMac and PowerBook.
Computer sales grew about 6 percent for the company over a year earlier; Apple sold 836,000 Mac computers in the quarter. Sales of its desktop machines were down, largely as a result of a supply problem that pushed the debut of the latest iMac desktop past the back-to-school shopping season, but both its lines of laptops sold better.
Despite a steady flow of competing online stores and digital music players into the market, Apple's iPod and its iTunes Music Store remain at the top of the heap. Data from the research firm NPD Group show that Apple's market share in the digital music player market has climbed even as new players have entered the market: Apple's share of the digital music player market went from 79.1 percent in August 2003 to 90.7 percent this August. Sales of the iPod through Hewlett-Packard Co. accounted for 6 percent of total iPod sales in the quarter, even though that firm began selling its version of the iPod only in the last third of the quarter.
Apple's iTunes store, meanwhile, holds about 70 percent of the business of selling music files online. But NPD's data also show that the legal download services as a whole may have stopped attracting new customers over the past few months. The number of households still using file-sharing programs -- which allow Web surfers to download copies of songs without paying for them -- is still greater than the number of households buying at such services as iTunes, by about 6 to 1.
Apple's success in the digital music market hasn't discouraged competitors from trying to find a formula that will stop its progress. Dell and Virgin Electronics, for example, are introducing new players that compete with iPods. On the software side, Microsoft recently introduced a new version of its Windows Media Player software that offers some of the same music features as Apple's iTunes program.
In its desktop computer business, Apple appeared to miss a step when a supply problem left it without a new desktop computer for the back-to-school season. But a positive response to the new flat-screen iMac after its late-August debut has put analysts in a forgiving mood.
In a report this month from Steven Milunovich at Merrill Lynch, the analyst wrote, "Stores we checked are sold out within hours, and reviewers are writing glowing reports. . . . One sales rep we talked to said the iMac was the most in demand product he has ever seen."
As a result of positive reviews, and the fact that Apple's Mac OS X operating system remains immune to the overwhelming majority of viruses and malicious software circulating the Internet, Milunovich forecasts a 19 percent sales increase for Apple computers during the holiday season over last year.
Apple's stock has steadily risen from around $20 in January to a close of $39.75 yesterday, in a year in which share prices for many other tech companies have struggled.