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Wednesday 12th October 2005

Apple racks up record revenues, again 10:17AM, Wednesday 12th October 2005

For the second consecutive quarter Apple has announced record revenues and profits thanks in no small part to a 48 per cent growth in Mac sales over the past year.

The company made $430m profit on revenues of $3.68bn. This means profits are up fourfold on the same quarter last year.

Mac sales totalled 1,236,000 against just 836,000 a year ago. Laptop sales were particularly strong with 634,000 iBooks and PowerBooks sold (Apple no longer provides sales figures for individual Mac ranges). Desktop sales were over 600,000 for the fourth consecutive quarter, despite some fears that sales may be hit as potential customers wait for next year's Intel Macs.

'We're very pleased to report 48 per cent year-over-year growth in Mac shipments in Q4, as well as our tenth consecutive quarter of record iPod sales,' said Peter Oppenheimer, Apple's CFO.

He added that he expects revenues for the next quarter to be in the region of $4.7bn.

Although iPod sales were again at a record level, with 6,451,000 music players shipped, this represents only 4.8 per cent growth on the previous quarter and falls short of predictions that the company



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would sell around 8.5 million. As a result Apple's share price dropped by more than 11 per cent in after-hours trading. One compensation was the news that the iTunes Music Store was in the black for the first time. Apple is currently selling 1.8mn downloads every day and has an estimated 70 to 80 per cent of the world market.

Temporary disappointments aside, Apple can safely assume that iPod sales will soar in the next quarter since it covers the Christmas shopping period. Tim Cook, Apple's executive vice president of Worldwide Sales and Operations, said in a conference call following the results announcement that demand for the new iPod nano is 'staggering'. One million were shipped in the 17 days between its unveiling and the end of the last quarter with Cook adding that there is huge over-demand.

'We ended the quarter with enormous backlog, and at this point, I can't project when supply would meet demand,' he said.

Cook also confirmed that new iPod models will be released in time for the Christmas shopping season. Apple is holding a 'special event' this evening when these are expected to be introduced.

The quarter brings Apple's financial year to a close in which it generated revenue of $13.93bn and a profit of $1.335bn, reflecting annual growth of 68 per cent and 384 per cent respectively.

'We're thrilled to have concluded the best year in Apple's history,' said Steve Jobs, Apple's CEO. 'This is the direct result of our focus on innovation and the immense talent and creativity at Apple. We could not be more excited about the new products we're working on for 2006.'

Simon Aughton

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