Apple hits record price as sales of iPods soar

Apple Computer shares hit a new record on Tuesday as Steve Jobs, chief executive, revealed that the runaway success of its iPod portable music and video players had pushed its sales up by nearly two thirds in the final three months of last year.

Apple also launched its first computers based on Intel microprocessors six months earlier than it had previously indicated, marking an important technology transition as it tries to make its computers a more mainstream choice for consumers.

However, Mr Jobs disappointed some observers who had hoped that he would seek to capitalise on the iPod’s dominance to launch other products that would push further into digital media and entertainment and help to maintain strong sales growth.

Speaking at the annual MacWorld show in San Francisco, Mr Jobs said that Apple’s revenues had reached $5.7bn during the final three months of last year – well ahead of expectations on Wall Street.

While most analysts expected sales to increase by 44 per cent from a year before, the company turned in growth of 63 per cent.

Apple sold 14m iPods in the first fiscal quarter, up from 4.6m the year before, Mr Jobs said.

The player’s dominance of the portable music market also helped Apple to cement its control of the market for legally downloaded music, with a claimed 83 per cent share of all downloads during the period.

The latest surge in demand caps Apple’s transition from an also-ran in the PC era to an early leader in the digital media world.

“Apple is moving step by step towards the living room,” said Ted Schadler, analyst at Forrester Research. “[A home digital media device] is premature, but it’s where they’re going, and it will be clearly very disruptive when they do it.”

Mr Jobs also announced the immediate availability of the first desktop computers running dual-core processors made by Intel, with Intel-powered laptops shipping next month.

The switch from chips made by IBM and Freescale, which was announced back in June, was intended to let Apple tap into more powerful processors that consume less power, particularly in the laptop market, where it had fallen behind.

However, some analysts have warned that the transition potentially carries risks for the company, because software makers will have to rewrite their programs to run on the new machines and some customers may hold back their purchases until the Intel-based computers are available.

All new Macs will come with Intel chips from the end of this year, Mr Jobs said, a year earlier than indicated earlier.

Apple’s shares were trading 6 per cent higher at $80.85 by the close in New York on Tuesday, above their previous record of $77.20.