iPod boosts Apple profits

Holiday sales up 50% from last year

The iPod steamroller showed no sign of slowing down over the holidays, as Apple sold a record 21.1 million units of its digital music and video player last quarter, up 50% from a year ago.

Perf helped drive Apple profits up 78% to a record $1 billion. Revenue rose 24% to $7.1 billion.

News came as a report in the Toronto Sun indicated Apple will start selling Beatles songs via iTunes. Announcement may come via a Super Bowl ad.

Nearly half Apple’s Q4 2006 revenue — $3.4 billion — came from iPod sales. However, iPod revenue was up only 18%, significantly less than unit sales. That indicates that much of the growth is coming from lower-priced iPod units like the Nano and Shuffle, instead of the high-priced video iPod.

This June, Apple will introduce its most expensive and fully featured iPod yet, the iPhone, which makes phone calls, connects to the Net, plays video and music, and features a touch screen.

Company will also next moth start selling the Apple TV device, which streams iTunes content into the living room. It’s a key component of the company’s strategy to sell movies, though so far it only has a full set of titles from Disney and library pics from Paramount.

Revenue from iTunes and other digital media grew 29% last quarter to $634 million.

Apple stock closed down 2% at $94.95 Wednesday before earnings were announced.

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