Apple shipped more iPods than Macs during its most profitable quarter for nine years.

It shipped 836,000 Macs and 2,016,000 iPods in the quarter - 6 per cent more CPU shipments and 500 per cent more iPods, year-on-year. iPods bought in more revenue ($537 million) than any other single product segment, the company revealed. However, computer sales fell 5 per cent in comparison to the third quarter 2004, though supply problems and the late-shipping iMac undoubtedly skewed the figures.

A jubilant Apple CEO, Steve Jobs, exclaimed: "We are thrilled to report our highest fourth quarter revenue in nine years. We shipped over two million iPods, our retail store revenue grew 95 per cent, year-on-year, and the new iMac G5 has received phenomenal reviews and is off to a great start."

Apple chief financial officer, Peter Oppenheimer, said: "We're pleased to report 37 per cent revenue growth for the quarter and operating margin above 5 per cent."

The financial chief also laid out aggressive new targets for the coming Christmas and Thanksgiving quarter: "Looking ahead to the first quarter of 2005, we expect revenue of between $2.8 and $2.9 billion."

Net income for the year reached $276 million on revenue of $8.28 billion, compared to net income of $69 million on revenue of $6.21 billion in 2003.

Crucially, Apple's research and development spending also rose year-on-year, from $111 million to $122 million. The company also drew a $5 million charge for internal restructuring, as it creates its new iPod division.