Speaking in a conference call, Apple Chief Financial Officer Fred Anderson lauded strong sales of software, such as Mac OS X 10.3 upgrades, as well as sales of peripherals and iPods; he also noted that portable computer sales were at a "record high," validating Apple CEO Steve Jobs announcement of 2003 as "the year of the laptop."
Anderson also called it a "blowout quarter" for the iPod. An Apple press release stated that 733,000 iPods were sold in the quarter, an increase of 235 percent from the year-ago quarter, with "a little over two-thirds" being U.S. sales. "It remains clearly the number one MP3 player" in the market, he said.
Overall Macintosh shipments hit 829,000, up 12 percent from the year-ago quarter. Anderson broke out some details, saying that Apple sold 206,000 Power Mac professional desktops and 227,000 iMac consumer machines in the quarter. The Power Mac sales showed a "stronger than expected" demand for the high-end, dual-processor model.
At the same time, Anderson observed that overall numbers for the Power Mac line were probably depressed by the late-quarter—and long-anticipated—introduction of the Power Mac G5.
Overall, Anderson said, the channel inventory was slightly down, as were gross margins, which dipped from 27.6 percent during the year-ago quarter to 26.7 percent. The latter, Anderson said, was lowered by unexpected warranty costs, particularly for the iBook and 15-inch PowerBook models.
Education sales were up eight percent compared to last year, Anderson said. European sales also saw a rise, of 48 percent year-over-year.
The Apple retails stores also contributed to the bottom line, Anderson said. The company had an average of 69 stores in operation during the quarter, with the average store revenue coming to $4 million, up from last year. The stores will focus on "switchers," small businesses and service, Anderson said.
Looking ahead, Anderson said Apple anticipates continued growth from the iTunes Music Store and iPod sales. He also said the company expects to see a third consecutive quarter of growth with a target of eight to ten cents profit per diluted share.