Apple's iPod is enjoying spectacular success in the MP3 player market, the company claimed yesterday.

Yankee Group analyst Ryan Jones describes the product as an "unbelievable hit".

The company's quarter has shown some good results, but, despite this, Apple CEO Steve Jobs said: "Looking forward, we do not expect our industry to pick up anytime soon, though we're hoping to help put a lot of iPods, iMacs and iBooks under trees this holiday season. Apple will continue to invest through this downturn to create the industry's most innovative products and best buying experience."

The MP3 player's success is borne out in the Japanese market where it became the biggest selling MP3 player in September with 42 per cent of the market. Apple's chief financial officer Fred Anderson said: "We're clearly very interested in gaining market share in the whole MP3 space."

Apple's summary data shows sales worth $193 million in the peripherals and other hardware product category. This equates to a 30 per cent rise in revenue in the category, driven by iPod sales.

Looking forward, Anderson expressed optimism for iPod sales over Christmas.

Three iPod models are available in capacities of 5, 10 and 20GB. Prices start at £259, the next two models cost £329 and £398.99. Even the entry-level model can carry over 1,000 songs. The product also doubles up as an external FireWire hard drive and contacts manager.