Intel Macs, iPods Boost Apple Profit 48%

The company calls the results the second-best quarterly revenue in its history. Sales of Macs and iPods account for a net profit of $472 million.

Strong sales of Intel-powered Macintosh computers and iPods helped Apple Computer report third-quarter net income of $472 million and earnings per share of 54 cents on revenue of $4.37 billion.

Officials of the Cupertino, Calif., company said that with revenue up 48 percent from a year ago in 2005, Apple was able to report the second-best quarterly results in its history.

Apples results were well above the net income of $320 million and revenue of $3.52 billion in the same quarter a year ago.

These results were well ahead of Thomson First Call projections calling for earnings of 44 cents a share.

Sales of the iPod had slowed, but not as much as some predicted. In the second quarter of 2006, the company reported selling 8.5 million of the popular MP3 players. This quarter, the company sold 8.1 million—a 4.7 percent decline.

However, sales of the iPod were up 32 percent compared to last years third quarter.

Apple reported that it had sold 1.3 million Macs, which represents a 12 percent growth over the year-ago quarter.

"Were thrilled with the growth of our Mac business, and especially that over 75 percent of the Macs sold during the quarter used Intel processors. This is the smoothest and most successful transition that any of us have ever experienced," Steve Jobs, Apples CEO, said in a statement.

Industry observers have been eagerly awaiting third-quarter results to see how the introduction of Intel-based Macs would affect Apples earnings.

On Jan. 10, Jobs unveiled the new iMac and MacBook Pro with Intels new dual-core Core Duo processor during his keynote address at the Macworld Expo in San Francisco.

The MacBook Pro was shipped later than the iMac. The MacBook and the Mac Mini also use the Intel processor.

/zimages/6/28571.gifRead more here about Apples announcement that it would start using Intel processors in its computers.

Now Mac users, developers and analysts are anticipating the imminent arrival of the first preview version of "Leopard," Apples latest version of OS X. Its scheduled to debut at the Aug. 7 Worldwide Developers Conference in San Francisco. Mac enthusiasts have been speculating about what features the new system will contain.

The rumor mill went into high gear just before Apple announced its quarterly earnings. Apple news site Think Secret wrote that Jobs would announce a deal that would allow movie rentals through the iTunes Music Store. That announcement, Think Secret wrote, would also come at the August conference.

An Apple spokesperson told eWEEK that the company would not comment on the story. During a call with investors, Apple executives were tight-lipped about any new products in the pipeline.

Peter Oppenheimer, Apples chief financial officer, said the 1.327 million Macs sold in the third quarter of 2006 represented the highest number of units ever sold in a 13-week quarter.

About half of the Macs sold at Apples retail stores were to customers new to the platform. However, Oppenheimer said sales to professional users were slower, since many were awaiting the Intel-based desktops as well as universal software applications.

In addition, Oppenheimer said customer feedback has been "very good" on the beta version of Boot Camp, software that allows Macs with Intel processors to run Windows XP as well as Mac OS X. Boot Camp is showing particular appeal for Windows users who might want to switch to a Mac, Oppenheimer said.

/zimages/6/28571.gifClick here to read columnist David Morgensterns take on the new Mac operating system. What will it take to run "Leopard"?

The fact that Apples notebooks led the way this quarter comes as no surprise to Stephen Baker, an analyst at The NPD Group, in Port Washington, N.Y.

"Theres been a lot of pent-up demand and that brings a lot of sales early in the product cycle," Baker said. "The notebooks have been pretty long in the tooth and I think a lot of people were waiting for the release date."

As for the iPod, Baker said sales were slow, but might pick up when students prepare to return to school in the fall. He added that Apple has made up for the lagging iPod sales by offering more accessories for its digital music player.

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