Apple's record $1 bil profit up 78% from year ago

Apple Inc. shipped 21.1 million iPods in its first fiscal quarter, 50% more than in the same quarter a year ago, a primary factor in the company's Wednesday posting of a record $1 billion quarterly profit, 78% better than last year.Apple, which recently dropped "computer" from its corporate moniker, shipped 1.6 million Macs during the quarter, 28% more than a year ago.

Revenue increased 24.5% year-over-year to $7.1 billion, with $3.4 billion coming from iPod sales. Other music-related revenue, including sales at Apple's online iTunes store, totaled $634 million. Chief financial officer Peter Oppenheimer said the iTunes store now features 4 million songs, 350 television titles and 250 film titles, and he called demand for the iPod during the holiday season "extraordinary."IPod had a 72% share of the market of digital-music players in December, according to research firm NPD, and the International Federation of the Phonographic Industry said Wednesday that digital-music sales doubled last year to about $2 billion, or about 10% of all sales.

Oppenheimer said sales of Apple gift cards doubled year-over-year, and the company ended the quarter with $11.9 billion in cash.
The company managed to beat Wall Street expectations on all fronts -- revenue, earnings and earnings per share. Nevertheless, the stock fell 2.2% during regular trading and, after an initial $4-per-share surge after-hours when earnings were released, the stock continued its fall.

One issue dogging the stock has been the company's acknowledgment that it had backdated some stock-option grants. On a conference call Wednesday, Oppenheimer mostly deflected questions about the matter, saying not much more than that Apple was "voluntarily and proactively" cooperating with federal officials looking into the matter.
Also, Apple guided for up to $4.9 billion in revenue for its fiscal second quarter, while analysts were looking for about $5.2 billion.Apple ended the quarter with 170 stores, including five added during the quarter, and Oppenheimer said 28 million people visited the stores in the quarter.

Apple this year expects to be selling from those stores, as well as other outlets, its iPhone and Apple TV set-top box."We've just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone," CEO Steve Jobs said in a statement. He was not on the conference call.

Oppenheimer said a lawsuit filed against Apple by Cisco Systems over the iPhone name was "silly," as other companies already have used the term to describe Voice-over Internet Protocol, and Apple is the first to use it on a cell phone.

The Hollywood Reporter

Global Online Music Sales Doubled In 2006

RECORD LABELS HAVE SOLD AN estimated $2 billion worth of music online or through mobile phones in 2006, doubling the previous year's sales and accounting for 10% of the total music market, according to the International Federation of the Phonographic Industry (IFPI)' s Digital Music Report 2007.
The number of songs available online doubled to 4 million. Single-track downloads totaled approximately 795 million--up 89% from 2005. The U.S. accounted for the bulk of those sales, with 582 million single tracks sold online in 2006, up 65% from 2005.
Mobile music accounted for half of global digital revenues in 2006--although its prominence varies by country, such as in Japan, where 90% of digital music sales are mobile purchases.
The IFPI wrote that 2007 could be a banner year for mobile music with handset makers such as Nokia and Sony Ericsson developing their music phones, as well as the impending release of the Apple iPhone.
Portable players drove growth in the digital sector, while there also has been increased diversification of digital music distribution channels.
iTunes and other a-la-carte digital download services remain dominant, the report found, though they have gained competition from subscription services, mobile mastertones and advertising-supported models and video-licensing deals on sites like MySpace and YouTube.
The IFPI predicted that online sales would account for a quarter of all music sales worldwide by 2010.
Yet these strong figures and the inclusion of advertising-funded services as a source of revenue stream for record companies failed to compensate for an overall decline in CD sales.
More, the IFPI report expressed concern about the continued threat of digital piracy and the devaluation of music content, with the IFPI saying it would sue ISPs that allowed known digital music pirates to operate over their networks.
"The chief winners in the rise of digital music are consumers," said IFPI chairman and CEO John Kennedy in a statement. "Yet the market remains a challenge."

Mediapost.com