The continued popularity of Apple's iPod music player helped the company to a rise in second-quarter revenue and profit, as compared to last year's second quarter, Apple announced.
Second-quarter revenue was $1.9 billion (around £1.1 billion), up 29 percent from revenue of $1.5 billion in last year's second quarter. Net income was $46 million (£26 million), up sharply from the $14 million in net income posted in the second quarter a year ago.
Apple shipped more iPods in the second quarter than it did Macintosh computers. A total of 807,000 iPods were shipped, but that accounted for only $264 million in revenue. The 749,000 Macintosh units shipped during the quarter generated $1.2 billion, and exceeded the 711,000 units shipped in the second quarter of 2003 for $1.1 billion in revenue.
Sales of PowerMac systems were held back in the quarter as Apple moved to reduce the amount of inventory in its channels, which meant it shipped less systems, said Tim Cook, executive vice president of worldwide sales and operations.
Shipments of Apple's Xserve, a server based on a new version of its G5 processor, were also hampered due to problems at IBM, Apple's chip supplier, Cook said. "We were not happy with the deliveries we got. IBM is working to bring supply in line with demand," Cook said.
Apple moved the worldwide launch of the iPod mini to July based on the exceptionally strong demand for the product in the US, said Peter Oppenheimer, senior vice president of finance. The company expects iPod supply to be constrained in the third quarter based on component shortages, but Apple hopes to catch up in the fourth quarter, he said.
The total number of iPods shipped in the second quarter increased more than ninefold compared to the second quarter of 2003.
The strong increase in iPod shipments was helped by the expansion of Apple's distribution channels, Oppenheimer said. The company opened five new Apple stores in the quarter, and expects to open another 10 stores by the end of the year, including a store in London, he said.
Apple has also increased the number of retail outlets that carry the iPod, especially in markets outside the US, Cook said.
Overall shipments of Apple products increased 7 percent in the Americas and 4 percent in Europe, as compared to the second quarter of last year. However, shipments in Japan fell 29 percent compared to last year's second quarter.
Apple expects to record $1.9 billion in revenue during the third quarter, it said.