Apple Buoyed By ‘Extraordinary’ iPod Sales

Apple executives had plenty to gloat about in an earnings call with
analysts today. The company posted record
of $7.1 billion and a record net quarterly profit of $1 billion in quarterly earnings, well above estimates.

The hot-selling iPod continued to
fly off store shelves, with Apple reporting more than 21 million units sold this past quarter, a 50 percent jump from a year ago. Apple also said it shipped 1.6 million Macs in the quarter, a 28 percent rise from a year ago.

And Apple  said it expects iPod sales to keep on booming
and, despite competition from Microsoft  and others, doesn’t plan to cut prices. “We sold 21 million iPods, price is not an issue,” said Apple’s
Chief Operating Officer Tim Cook. “Customer think they are a great value and
the same for the Macintosh.”

CEO Steve Jobs was not on the conference call, but Chief Financial
Officer Peter Oppenheimer was asked about the stock options backdating
investigation that threatens to impact Jobs.

“We have voluntarily and proactively provided all details of our review
to the Securities and Exchange Commission and the U.S. Attorney and found no
misconduct by any member of the current management team,” said Oppenheimer.

While the Apple Board cleared Jobs and other members of the current
management team of misconduct, the SEC is continuing its investigation and
Oppenheimer confirmed the company is continuing to provide them with

Outside of the stellar financial and sales figures there were a few other
tidbits of news in the call. Cook reported that there are now more than 7,500
stores or distribution points selling Macs worldwide, up 1,500 from a year

There are more than 40,000 distribution points for iPod, a number that’s
held about the same for the past several quarters, with the majority outside
the U.S. Apple itself operates 170 Apple stores, which generated $1.1
billion in revenue, the highest quarter to date.

Per its standard practice, Cook would not comment on future product
details but he did address a few things related to the much-anticipated iPhone release.

Asked about 3G  support, Cook said,
“At this point we’re very much sold on the Edge network with Cingular
because it’s more widely available in the U.S. We don’t comment on our road
map, but obviously we want to be where the technology is going over time.”

Cook also said that for the first time, more than 50 percent of Mac sales
at retail were to new customers. “We expect to bring many new customers into
stores for the iPhone in June.”

The iPhone dominated CEO Job’s keynote at Macworld Expo last week, with
the only other new product discussed, the Apple TV
device (formerly known as iTV), due out next month.

Cook said the new Leopard
operating system is still on track for delivery this Spring. He said there have been over 1.5 million downloads of the beta version of “Bootcamp” software which allows Intel-based Macs to run Windows and that Apple plans to include it as part of Leopard.

As for Apple TV, Apple expects big things. “We see it as the DVD player
for the 21st century,” said Cook.

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