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Apple Posts Record Quarter, Sells 21.1 Million iPods

1/18/2007 10:46:00 AM Eastern

Cupertino, Calif. — Apple announced another record breaking quarter, ended Dec. 30, resulting from “very strong” sales of iPods and “robust” sales of Macs, the company said.

Revenue hit $7.12 billion, growing 24 percent from the quarter a year ago, and net income hit $1 billion, up 78 percent.

Sales of iPods for the quarter were 21.1 million, marking a 50 percent increase over the quarter a year ago, despite warnings from analysts that the market growth for MP3 players will slow over the next few years, down to about 10 percent annually. In addition, Apple said it maintained its high market share, achieving 72 percent share in the United States in December, according to NPD Techworld figures.

The company also said it shipped 1.61 million Macs, representing 28 percent growth over the year-ago quarter, and achieving three times the growth estimates for the market as projected by IDC, Apple said. Portable Macs represented 60 percent of Mac sales and the portable Mac sales grew 65 percent.

Music revenue fueled by iTunes sales was up 29 percent. iTunes now accounts for 85 percent of songs downloaded and purchased in the United States, Apple said, and sales of iTunes gift cards doubled over the holidays.

For Apple retail stores, sales hit a record $1.1 billion with five new stores opening during the quarter, reaching a total of 170 locations. Average revenue per store was $6.7 million. Almost 28 million people visited Apple stores during the quarter, representing 13,000 customers per store, per week and the stores had gross margins of 31.2 percent.

Apple chief financial officer Peter Oppenheimer called demand for the iPod “extraordinary” and said all three iPod models “did exceptionally well,” including the new Shuffle which shipped in October. Oppenheimer also noted that unlike last year, iPod supply kept up with demand over the holidays, which helped boost sales.

The company also noted that it continued to selectively expand its retail distribution of Macs, growing the number of outlets by 1,500 stores during last year to 7,500. This included a Best Buy pilot program for Macs, which was increased by 50 stores during the holiday quarter. Oppenheimer said, “We will be working with Best Buy this quarter to evaluate those and conclude what our next steps are.”