Apple Posts Record 2nd Quarter Sales

Apple blew past expectations, announcing record second quarter earnings and a net profit of $290 million, according to data released late Wednesday. But the good news did not end there for the Cupertino-based company; 1 million Macs and an astounding 5.3 million iPods were shipped during the quarter.

Pete Oppenheimer, Apple's CFO, told analysts in a conference call Wednesday that much of the demand behind the iPod came from "strong response to the iPod Shuffle," and data showed that in February the Shuffle had a 43 percent share of the Flash-based market.

According to Wall Street estimates, Apple was expected to record earnings per share of 24 cents on revenue of $3.2 billion. The company surpassed both numbers, posting earnings of 34 cents on revenue of $3.25 billion. Domestic sales accounted for 60 percent of the Apple's revenue during the quarter.


"We are delighted to report a record second quarter for Apple in both revenue and earnings," said Apple CEO Steve Jobs in prepared remarks. "Apple is firing on all cylinders and we have some incredible new products in the pipeline for the coming year, starting with Mac OS X Tiger later this month."

Apple also announced that it expects next quarter's revenue to remain at $3.25 billion.

"Continued increases in iPod sales are clear indication that the device has achieved iconic status. The situation creates huge opportunity for Apple and huge barrier for other portable music player manufacturers," Joe Wilcox, senior analyst at Jupiter Research, told BetaNews. "Sequentially, iPod revenue fell 16 percent, even as unit sales rose 16 percent. The difference suggests the impact of lower iPod pricing."

In recent months, there has been a good deal of discussion involving a so-called "halo effect" around the iPod - meaning that the popularity of the iPod and positive user experiences would help to drive Windows users to the Mac platform.

Wednesday's results indicate that the "halo effect" may indeed be real: as iPod sales have increased, so have sales of the Mac. Additionally, over 40 percent of retail Mac customers in the second quarter never owned an Apple computer before.

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