Apple disclosed record-breaking third quarter results last night, it also delivered guidance on its business operations.
Industry observers have speculated that iPod sales have been slowing, Apple's results confirmed a slight slowing of growth when compared to last year's outstanding increase in demand, the company still shipped 6.155 million units - a new record.
iPod and music products
Apple chief financial officer Peter Oppenheimer said the company is "hard at work" on its next generation of music products, and said that iPods are available in 25,000 storefronts globally, up from 21,000 at the beginning of the quarter. Making the product available through US Wal-Mart stores helped achieve this.
iPods sales attracted $1.103 billion in revenue, up 9 per cent sequentially and 343 per cent year-over-year.
Asked if Apple intended unleashing a music subscription service, Oppenheimer declared that Apple doesn't think customers want to rent music, once again asserting they prefer to own music instead.
Mac sales climb as iPod drives demand
The company saw its highest Mac hardware sales in four years. Macs accounted for 52 per cent of total revenue with 1.182 million units shipped.
Apple has stopped offering a breakdown of unit sales by model, but continues to reveal sales in desktop and notebook categories. It shipped 687,000 desktops ($845 million in revenue, includes Xserves) while it sold 495,000 portable Macs, attracting $720 million in revenue (a new quarterly record).
Oppenheimer said that Apple's unit sales growth in the quarter was three times the industry average growth rate, according to recent market research. He also confirmed Apple now believes iPod sales to be helping growth.
Apple's Mac mini was described as an "important product", expanding the user base by attracting a new class of "price conscious buyer" who may never have acquired a Mac before.
Oppenheimer also revealed that the company has seen "no obvious reduction in Mac sales" since it revealed its future switch to Intel chips, but stressed it has only had a few weeks of data to assess this. As such, the company offered a "prudent" assessment for its fourth quarter operations. Channel inventory remains between four to five weeks.
Tiger roars - 2 million sales
The release of Mac OS X 10.4 "Tiger" set its own record too. Oppenheimer described it as: "Apple's most successful software product launch yet". Two million copies shipped. The company confirmed over 100 applications to have been recompiled to run on future Intel processors, and described its OS X user base as now close to 16 million seats. Apple's professional video and audio products have also impressed, the company said.
Education, education, education
Apple continues to achieve in the education market, where it saw sales climb 16 per cent, year-on-year. The company also saw its best June quarter in the education market for nine years.
Higher education sales climbed 34 per cent year-on-year, with Mac sales to faculty and students climbing 37 per cent.
Apple continues to reap rewards in the sector, with its UK education sales reportedly particularly strong.
Apple retail, a growing concern
Oppenheimer confirmed Apple's plan to have 125 retail stores open by the end of 2005. Revenue from these stores rose 56 per cent, year-on-year. Apple is "really happy" with its stores he added, which attract an average 8,900 customers per store per week.
The retail stores attracted $555 million revenue, and sold 144,000 Macs, Apple revealed.
Revenue rose 89 per cent in the Americas; 75 per cent in Europe and 39 per cent in Japan, the company said.
Apple's operations in Japan are the only blight on the company, according to Apple vice president of sales Tim Cook, who said he was "unhappy" with the company's performance there.
With $7.526 billion in cash reserves and no outstanding long-term debts, Apple is in a position to make "strategic investments" if required, Oppenhemer said.