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Apple Rides Sales of iPods, Macs to Record Revenue, Profit

Posted on: Thursday, 18 January 2007, 15:00 CST

By Mike Musgrove and Alan Sipress, Washington Post Staff Writers

Apple said yesterday that it set new records for revenue and profit in a single quarter, citing shipments of more than 21 million iPods and brisk sales of Mac computers during the holiday season.

Revenue for the fiscal first quarter ended Dec. 30 was $7.12 billion, up 24 percent from the comparable quarter a year earlier. Profit was $1 billion, up 78 percent.

Online music sales from Apple's iTunes Store rose 20 percent, finance chief Peter Oppenheimer said during a call with analysts.

The quarterly results "clearly reinforce Apple's dominant position" in the online music and music player market, said Michael Gartenberg, an analyst with Jupiter Research. "What we're waiting to see next is whether Apple will be able to have that success in new product categories."

At the Macworld Conference and Expo last week, Apple announced an iPod phone, called iPhone, and a networking device, Apple TV, which wirelessly transfers video images from computers to television sets.

Apple's stock rose to an all-time high the day the new products were announced.

Analyst Rob Enderle said Apple might soon start to feel more pressure from its longtime rival Microsoft, which is about to launch a big marketing splash for Windows Vista, the biggest upgrade of its operating system since the arrival of Windows XP in 2001. That "will probably keep people out of Apple stores for a while," Enderle said.

Apple also has an operating-system upgrade in the works, scheduled for release this spring, though the company is not likely to make a similar marketing push.

More eagerly anticipated is the June arrival of the iPhone, which needs certification from the Federal Communications Commission and has a trademark lawsuit hovering over it.

Cisco Systems sued Apple over the use of the iPhone name, claiming that it holds the right to it. When Oppenheimer was asked yesterday whether Cisco's lawsuit could delay the release of the iPhone, he called the trademark challenge "silly."

"We're confident we'll prevail," he said.

The company was also asked yesterday about the implication of chief executive Steve Jobs in a scandal involving improper backdating of stock options.

Oppenheimer said yesterday that Apple is cooperating with the Securities and Exchange Commission and the U.S. attorney's office for Northern California by providing details of the company's internal investigation of the matter last year.

"We are continuing to voluntarily and proactively inform them of our findings and answer their questions," he said.

Oppenheimer repeated previous company statements that its "exhaustive and independent investigation" found no misconduct by Apple's current management.

The U.S. attorney's office confirmed last week that it is investigating irregularities in Apple's awarding of stock options.

Shares of Apple fell $2.15 yesterday, to $94.95.

Reported By TechNews.com, http://www.TechNews.com

(20070118/WIRES /)

Source: Newsbytes

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