Apple sold $7.1 billion of product in Q1 compared to $5.7 billion in the same period last year, a surge in sales that was largely down to strong Christmas demand for the iPod. During the period, Apple shipped 21 million iPods and 1.6 million Macs – a rise of 50 per cent and 28 per cent respectively compared to Q1 last year.
“We are pleased to report stellar financial results and another record quarter for Apple,” said the firm’s CFO Peter Oppenheimer.
Contrasts can be drawn with Intel’s recent drop in profits, highlighting the success gadgets and consumer electronic products have enjoyed of late, compared to that of traditional PC and component vendors.
However it’s not all plain sailing for Apple, with the firm’s founder Steve Jobs the subject of controversy at the hands of a government stock options probe. Jobs is accused of backdating his share options to a time when they were worth less. This factor, amongst others, has somewhat dampened stock market reaction to the successful financial results. Investors sent shares up by a mere 3.3 per cent in the after hours markets upon hearing of the firm’s Q1 earnings, and later pushed them back down again by one per cent.
iTunes has provided further reasons to temper enthusiasm for Apple’s recent successful stint, following a collapse in its sales revenues last year (according to analyst firm Forrester Research.) The firm claims that the direct download service is failing to effectively compete with online CD sales.
"The comparatively modest iTunes numbers suggest that consumers are still spending the bulk of their music budget $14-at-a-time on shiny discs," said analyst Josh Bernoff. "iTunes sales are not cutting into CD sales, they’re an incremental purchase at best.”
Despite this, Apple is looking forward to a similarly strong Q2 – forecasting that revenues will fall between $4.8 and $4.9 billion.