Sales of iPods surprise analysts, allay concern

Thursday, July 14, 2005 | 9:27 a.m.

Apple Computer Inc.'s surge in iPod sales in the third quarter surprised analysts and doused concern that demand for the music players has peaked.

IPod shipments rose to a record 6.16 million, Cupertino, Calif.-based Apple said yesterday. The sales eclipsed the 5.29 million average estimate of eight analysts surveyed by Bloomberg News and defied predictions that consumer appetite for the players waned in the second quarter.

"We missed it, but we're happy," said Eugene Munster, an analyst at Piper Jaffray Cos., who predicted 5.5 million iPods would be shipped in the period. "This will quiet the bears."

Apple generated record iPod sales in a quarter that's typically less robust than other periods, signaling shipments will continue to grow, Munster said. Apple, which made its name selling Macintosh computers, now gets a third of its revenue from the iPod, first unveiled by Chief Executive Steve Jobs in 2001. The gadget has attracted users ranging from Bono, the lead singer of rock band U2, to the Queen of England.

Profit in the quarter ended June 25 rose fivefold to $320 million, or 37 cents a share, Apple said last night. Revenue climbed 75 percent to $3.52 billion. Sales and profit rose to the highest-ever levels and beat analysts' estimates for the seventh- straight quarter. Macintosh shipments reached a five-year high.

Shares of Apple traded at the equivalent of $39.64 at 10:01 a.m. in Germany, up 3.4 percent from yesterday's closing price of $38.35 on the Nasdaq Stock Market. Before today the stock had gained 19 percent this year after more than tripling last year.