Today in Apple history: iPod drives profits to new heights | Cult of Mac

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

January 12: Today in Apple history: iPod drives Apple profits to new heights January 12, 2005: Apple reports record earnings for the preceding three months. Holiday sales of the iPod, and demand for the latest iBook, give the company a four-fold increase in profits.

Apple brags that it sold a total of 10 million iPods, and rightly so. The massive popularity of the portable music player drives Apple to its highest earnings yet.

iPod powers record Apple earnings

Today, big earnings for Apple are nothing new. While iPhone demand plateaued a few years ago, Apple’s services business ramped up. And increasing demand for Macs during the COVID-19 pandemic helped drive Apple’s market capitalization above the $3 trillion mark in early 2022. (The recent tech stocks selloff brought Apple closer to a $2 trillion valuation.)

In 2005, however, Apple was still climbing. The iPod-fueled earnings wowed investors who still remembered the painfully bad old days of the 1990s.

In Apple’s January 12, 2005, earnings report, Cupertino revealed that it achieved sales of $3.49 billion in the previous quarter. That amounted to a massive 75% increase on the $2 billion it made during the same period the year before. Net profit for the quarter skyrocketed to $295 million, up from $63 million for the same quarter in 2004.

The phenomenal success of the iPod proved key to Apple’s growth. The gadget became as much of a cultural fixture of 2005 as CSI, Guitar Hero and Carrie Underwood on American Idol.

Demand for the iPod could hardly have been greater, with the product line seeing a whopping 525% unit growth in the preceding three months. In all, it commanded approximately 65% of the portable music player market.

Apple wins with iTunes and Apple Stores, too

Apple wasn’t a one-trick pony, either. While the iTunes music store pioneered a whole new way to sell music, Apple’s online store went from strength to strength. In the non-digital world, brick-and-mortar Apple stores continued to expand. (Apple had just opened its first store outside the United States.)

Mac sales also were rising, thanks to innovative products like the gorgeous iBook G4 (which received a late-2004 upgrade) and the powerful iMac G5, which stomped all over its PC rivals.

Looking back from today’s vantage point, what is so impressive about Apple in 2005 was the way the company managed to juggle its different products so effectively. Sure, the iPod was the big focus — and the product line 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 today as it ever was? Leave your comments below.


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