Apple Computer Inc. said fourth quarter profit more than doubled on surging sales of its iPod digital music player.

Net income rose to $106 million, or 26 cents a share, from $44 million, or 12 cents, a year earlier, Cupertino, Calif.-based Apple said in a statement. Sales rose to $2.35 billion from $1.72 billion, compared with $2.15 billion expected by analysts surveyed by Thomson Financial.

IPod shipments rose to 2.02 million units from 336,000 a year earlier. Profit this quarter will be as much as 42 cents a share on sales of as much as $2.9 billion, as consumers snap up iPods and iMac computers for the holiday season, Apple said. Sales of the music player, unveiled by Chief Executive Steve Jobs in October 2001, helped Apple become the third-best performing stock in the Standard & Poor’s 500 Index this year.

“The iPod is getting more and more people into their brands,” said Louis Navellier of Navellier & Associates in Reno, Nev., before the report. The firm has $2.6 billion in assets, including 700,000 Apple shares. “It’s broadening out into computer sales. It’s just not digital music anymore.”

The stock rose $1.46 to $39.75 at 4 p.m. New York time in Nasdaq Stock Market composite trading. Apple shares have gained 86% this year and are trading near their highest levels since Sept. 28, 2000, when the shares closed at $53.50.

Excluding some expenses, fourth quarter profit was 27 cents, Apple said. On that basis, the company was expected to report earnings of 18 cents a share, the average of 21 estimates in a Thomson Financial survey.

Sales of the iPod, Apple’s fastest growing product, rose from $121 million a year ago.

Apple’s sales of Macintosh computers increased from $1.2 billion a year ago. Apple began shipping a new version of its iMac, which combines a monitor and computer into a single unit, in mid-September after delaying its release by more than two months.

Analysts such as Merrill Lynch & Co.’s Steven Milunovich and Gene Munster of Piper Jaffray & Co. are betting that customers who bought an iPod might be more willing to spend $1,299 or more on the new iMac during the holiday season.

Milunovich expects the company to ship 270,000 iMacs in the first quarter, a 19% jump from last year.

Jobs, 49, boosted iPod sales by introducing a “mini” version, which holds about 1,000 songs, costs about $250 and comes in five different colors, in February. Larger versions hold as many as 10,000 songs and cost as much as $399.

Apple also started selling the iPod through retailers such as Costco Wholesale Corp. and Sears Roebuck & Co. Hewlett-Packard Co., the world’s No. 2 personal computer maker, began selling a branded version of the iPod through 110,000 retail stores in mid- September.

The iPod won 82% of the market for hard-disk-based players sold in U.S. retail stores in the 12 months ended in August, compared with 64% in the same period a year earlier, according to Port Washington, New York-based NPD Group Inc. It had 33% two years ago.

Competitors including Japan’s Sony Corp. and Dell Inc. of Round Rock, Texas are trying to replicate Apple’s success by introducing their own music players. Virgin Group Ltd., owned by billionaire British entrepreneur Richard Branson, said yesterday it will sell its own music device.

“From here on, it’s war,” said Rob Enderle, an analyst with the Enderle Group in San Jose, Calif.