Apple Revenue Jumps, Sends Shares Higher

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The New York Sun

The chief executive of Apple Computer, Steve Jobs, surprised investors yesterday by delivering upside to even the most bullish estimates for iPod sales, during his highly anticipated speech at MacWorld.


But technology enthusiasts may be disappointed that the company didn’t release more products.


On the financial front, Mr. Jobs announced 14 million iPods were sold during the holiday quarter. Revenue in that three-month period came in at $5.7 billion, trumping the $5.04 billion analysts polled by Thomson First Call were expecting. Analysts were anticipating iPod sales between 10 million and 11 million during the December ended quarter.


The news sent shares of Apple higher, closing up $4.81, or 6.3%, at $80.86, on volume of 81.4 million shares. Average daily volume is 25.7 million. The shares reached as high as $81.89 yesterday, bettering the previous 52-week high of $77.20 set on Monday. Apple’s market capitalization increased about $4 billion yesterday.


An analyst at American Technology Research, Shaw Wu, described the iPod and revenue data as a “shocker.”


On the product side, some Apple loyalists may be disappointed that more wasn’t announced, but Apple did unveil a radio remote control for the iPod that sells for $49, and two computers running on Intel microprocessors – one a desktop and the other a notebook. Rob Enderle, of Enderle Group, a technology research firm, said the iPod radio remote puts Apple accessories makers on notice.


The notebook computer, dubbed MacBook Pro will sell for between $1,999 and $2,499 and will ship in February. Meanwhile, the desktop will sell for $1,299. Apple claims that with Intel chips, the new desktop will run two to three times faster than current desktop iMacs.


Executives and attendees at the MacWorld show said Apple’s use of Intel chips represents an important departure for the company and one that took some of them a little getting used to. “Certainly, it’s a big step up in performance,” a principal analyst at the market research firm Insight 64, Nathan Brookwood, said.


Mr. Brookwood doesn’t doubt Apple’s claims of improved performance with its new computers. It puts them in parity with the Windows machines on the market that already use Intel chips, he said.


Rampant speculation ahead of Apple’s biannual Macfest called for the Cupertino, Calif., company to also launch a new version of its iPod shuffle, some form of a digital entertainment device, and a slew of content deals, among the Intel-based computers.


“I was a little surprised there weren’t more content announcements,” said American Tech’s Mr. Wu, who doesn’t own shares of Apple. Apple did announce it will sell archived “Saturday Night Live” skits on its iTunes Music store.


While many Apple watchers were anticipating a lot of product announcements out of Mr. Jobs’s speech yesterday, analysts said the biggest and likely the most surprising news was its preannouncement for its fiscal first quarter.


“Certainly, shareholders will be pleased,” said Roger Kay, founder and president of Endpoint Technologies Associates, an information technology consulting firm. “They blew the doors off the financial results.”


Revenue of $5.7 billion is 63% higher than the $3.49 billion Apple reported in its fiscal first quarter last year.


The New York Sun

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