Today in Apple history: iPod drives profits to new heights


The iPod was kind of a big deal in 2005.
Photo: Jim Merithew/Cult of Mac

Jan12January 12, 2005: Apple reports record earnings for the preceding three months — with holiday sales of the iPod and demand for the latest iBook giving Apple a four-fold increase in profits.

Apple brags that it has sold a total of 10 million iPods, and that the massive popularity of its portable music player has driven Apple to the highest earnings in its history.

Big earnings, big risks

Today, big earnings for Apple are nothing new — even if they have taken a dip lately, as iPhone demand has plateaued and started to decline.

In 2005, however, Apple was still climbing, and wowing investors who still painfully remembered the bad old days of the 1990s.

In Apple’s January 12, 2005 earnings report it revealed that it had made sales of $3.49 billion the previous previous quarter: a massive 75 percent increase on the $2 billion it had made in the same period the year before.

Net profit for the quarter was $295 million, up from $63 million for the same quarter in 2004.

Key to Apple’s growth was the phenomenal success of the iPod, which was as much of a cultural fixture of 2005 as CSI, Guitar Hero and Carrie Underwood on American Idol.

Demand for the iPod couldn’t have been greater, and the product line had seen a whopping 525 percent unit growth in the preceding three months. In all, it occupied around 65 percent of the portable music player market.

Wearing many hats

But Apple wasn’t a one-trick pony, either. The iTunes music store was busy pioneering a whole new way to sell music, while Apple’s online store was going from strength to strength.

In the non-digital world, brick-and-mortar Apple Stores were continuing to expand, and Apple had just recently opened its first venue outside the United States.

Mac sales were also rising, with innovative products like the gorgeous iBook G4 (which had received a late 2004 upgrade), and the iMac G5, capable of stomping all over its PC rivals.

Looking back from today’s vantage point, what is so impressive about Apple in 2005 was the way it managed to juggle its different products so effectively.

Sure, the iPod was the big focus — and was about to benefit from the arrival of the newly-announced iPod Shuffle — but there was plenty of innovation happening elsewhere, too.

It was an exciting time to be an Apple fan. And, although we didn’t know it at the time, the best was yet to come.

What do you think was the best time to be an Apple fan? Is the company as exciting to you today as it ever was? Leave your comments below.