Apple Shares Jump on Word of iPod Sales
Shares of Apple Computer Inc. rose 7.3% to a four-year high after an analyst said holiday demand for iPod digital music players was better than expected.
Apple may have sold as many as 4.6 million iPods in the quarter ended Dec. 25, compared with analysts’ previous estimates of 4 million and more than double the 2.02 million it shipped in the prior period, First Albany Corp. analyst Joel Wagonfeld said in a note to clients Friday. First-quarter earnings, to be announced Jan. 12, could be as much as 50 cents a share versus the company’s forecast of as much as 42 cents, he said.
Rumors that Apple Chief Executive Steve Jobs may announce lower-priced music players and a Macintosh computer that sells for about $500 are also buoying interest in the company, Wagonfeld said. The cheapest current Macintosh is $800.
“Despite lower price points and potentially lower margins, each of these would provide incremental market opportunities by providing an Apple at the low end, where it doesn’t currently compete, “ Wagonfeld wrote. He rates the shares “buy” and doesn’t own them.
Shares of Apple rose $4.70 to $69.25 on Nasdaq. They earlier reached $69.63, the highest since September 2000. The stock tripled last year and was the second-best performer in the Standard & Poor’s 500 index.
New variations of Apple’s iPod, including the iPod mini and a photo-storing iPod, have fueled demand for the music players, which were first released in October 2001. Through Sept. 25, Apple sold 5.74 million players, making the iPod the company’s fast-growing product.
Hewlett-Packard Co. Chief Executive Carly Fiorina said Friday that her company would sell a version of Apple’s iPod photo in coming months. The company, the world’s No. 2 maker of PCs, began selling a version of Apple’s 20-gigabyte “classic” iPod in September and is now the No. 2 seller of hard-disk-based music players, Fiorina said at the International Consumer Electronics Show in Las Vegas.
The iPod leads the market for hard-disk-based music players. It captured 83% of the market for the 12 months ended in October and won 61% of the $71.4 million spent on all digital music players in U.S. retail stores in October, according to research firm NPD Group.
Wagonfeld said that if Jobs introduced a model using lower-priced flash-based memory drives, which would be cheaper but would store fewer songs than existing iPods, he would help Apple cement its dominance in the digital music market. Apple’s lowest-priced iPod is $249.
Jobs will speak at the Macworld Expo in San Francisco next week.
