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Apple’s profits surging

Sales rose 74% to $3.49 billion

Apple Computer’s first-quarter profit more than quadrupled as sales of iPod digital music players and iMac personal computers surged in the holiday gift-buying season.

Profits leaped to $295 million in the period that ended Dec. 25, from $63 million a year earlier, Apple said in a statement Wednesday. Sales rose 74% to $3.49 billion.

Shipments of iPods soared more than sevenfold last quarter to 4.58 million, for a total of more than 10 million. As customers snap up players, they’re also buying the company’s other products, including iMacs, said Piper Jaffray analyst Gene Munster.

Apple plans to open 24 retail stores in fiscal 2005, bringing the total to 125.

During the November-December shopping period, sales of the iPod, Apple’s fastest-growing product, jumped to $1.21 billion from $256 million a year earlier. The players, introduced in October 2001, made up 35 percent of total sales, compared with 13 percent a year earlier.

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Hewlett-Packard, which began selling a version of the iPod in September, accounted for 7% of the shipments. Palo Alto-based Hewlett-Packard, the No. 2 maker of PCs, will start selling an iPod that can store photos in coming months, chief executive Carly Fiorina said last week.

The company has sold more than 230 million songs through its iTunes online music store, topper Steve Jobs said earlier this week. Apple is selling 1.25 million songs a day, putting it on track to sell more than $400 million in music, at 99 cents a song, this year.

The store was slightly profitable last quarter, a company official said, noting that Apple does not intend “to make a lot of money on the store itself because we believe that selling music will help us sell iPods, which would help us sell computers.”