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Apple Reports Strong iPod, Music Sales
Wednesday, April 19th, 2006 at 6:05 PM - by
During its second quarter financial conference call, Apple announced that 50 percent of its quarterly revenue came from its music division, and increasing 79 percent compared to the same quarter last year. Apple reported US$4.36 billion in revenue for the quarter, the second highest in the company's history. iPod shipments are up 61 percent compared to last year, and the company has now sold over 50 million units.
Peter Oppenheimer, Apple's CFO, stated that the iTunes Music Store accounts for 87 percent of the legal music download market in the United States, and that the store now hosts over 2.9 million songs and over 70 different television programs.
The iPod market share is up, too, accounting for 78 percent of the portable music players sold. In December 2005, that number was at 71 percent.
Outside of the United States, the iPod is the top-selling MP3 player in the United Kingdom, Japan, Australia, and Canada. As far as Europe and Asia go, Apple is very optimistic about the potential for further market penetration.
Tim Cook, Apple's COO, comment during the earning conference call that it is increasing local advertising and point of distribution. "Since December in Germany," he said, "our share has improved by 10 points, up to 21 percent. And in France we gained four points up to 11 percent."
Despite strong iPod sales, Apple sees room for major growth in the MP3 player market. Based on sales of other consumer electronic devices, Mr. Oppenheimer noted, "The MP3 player market has a lot of room for growth. According to Forester research, U.S. household MP3 player penetration was less than one quarter that of digital cameras as of the end of 2005."
Looking forward, however, Apple is expecting iPod revenues may not be as high as investors would like next quarter as we see the full impact of reduced prices for the iPod shuffle, and the introduction of the 1GB iPod nano. Mr. Oppenheimer also noted that Apple is very excited about new music-related products in its product pipeline. He did not, however, offer any information about new product release dates.
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