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Apple's Sales, Revenues Much Higher than Expected

With analysts warning that Apple Computer's sales of iPods had likely peaked a quarter ago, the iPod maker surprised one and all with earnings that dramatically topped estimates and set a company record for that particular quarter. Apple Computer revenues jumped 75 percent, year-over-year, to $3.52 billion. The company earned $320 million in the quarter.

"We are delighted to report Apple's best quarter ever in both revenue and earnings," said Steve Jobs, Apple’s CEO. "The launch of Mac OS X Tiger has been a tremendous success, and we have more amazing new products in the pipeline." Tiger sales, apparently, have stalled somewhat, however: The company announced that it had sold 2 million copies of the system by the end of June 2005, the same figure it cited almost a month previously.

The real success for Apple in the quarter, of course, was the iPod. Apple sold 6.2 million iPods in the quarter, generating $1.1 billion in revenue. Those figures represent a 700 percent increase in sales, and a 400 percent increase in revenues, year-over-year.

Mac sales were strong as well, though it should be noted that most of these sales were posted before the company announced it was switching to Intel-based microprocessors. Apple sold 1.2 million Macs in the quarter, a 35 percent increase over the same quarter a year earlier. The Mac contributed $1.57 billion in revenues to the company's quarterly results.

The Mac results, taken back-to-back with the previous quarter, suggest that Apple has finally reversed its long market share downward spiral. Since Steve Jobs returned to Apple in late 1996, the company has consistently lost market share when compared to its PC-based rivals. This year, however, Apple has consistently outperformed the overall PC market and will likely see a slight market share increase, its first such increase in over a decade.

Looking ahead, however, it's likely that Mac sales will slowdown as customers anticipate the first round of Intel-based Macs in mid-2006. Apple says it's still too soon to determine how Mac sales will fare in the coming year as this transition begins. "We expect to learn more in the current quarter," said Timothy Cook, executive vice president of world-wide sales and operations at Apple, in an earnings conference call.

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