Apple's Profit Jumps as Intel's Plunges

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  1. ac2026

    ac2026 Notebook Enthusiast

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    Thursday, April 20, 2006:

    IPod, Mac Sales Drive 41 Percent Earnings Growth

    Silicon Valley sent a mixed message to investors yesterday as Apple Computer Inc. reported strong sales and profit for the last quarter while chipmaker Intel Corp. reported sluggish results.

    Apple, which saw year-over-year growth in both iPod and Mac computer sales, saw profit jump to $410 million from $290 million in its fiscal second quarter a year ago, an increase of 41 percent.

    Intel, which recently partnered with Apple to power its computers, blamed a slow PC market for its 38 percent slide in profit from a year ago. The company earned $1.35 billion in its most recent quarter.

    The first quarter of the calendar year tends to be slow for computer and electronics companies, which traditionally see strong sales during the holiday season.

    But Intel is also dealing with other issues: inventory problems and a market-share battle with smaller competitor Advanced Micro Devices Inc., which, unlike Intel, reported growth in processor sales during a more upbeat earnings announcement last week.

    Apple recently started shipping its computers with Intel processors inside. Apple executives said yesterday that some customers may be delaying their purchase of a Mac computer as they wait for upcoming software from the company or for Apple to complete that transition.

    For tech analysts, the question has long been whether Apple will be able to convert its recent hype, and iPod sales, into brisker sales for its Mac computers.

    Research firm NPD Group Inc. shows Apple having a growing share in the U.S. retail market in recent years -- to more than 7 percent last year from less than 5 percent in 2003.

    A recent survey by research firm SG Cowen & Co. found that interest in the Mac is on the rise among consumers interested in buying a new computer. Consumers who rated themselves as having a "definite" intention of buying a Mac rose to 7.8 percent in a survey conducted this month, from 6.1 percent in October 2005.

    NPD analyst Stephen Baker said the main dark spot for PC sales will take place this holiday season.

    Microsoft has announced that its next version of the Windows operating system -- called Vista -- has been delayed from its originally scheduled release this year, and that could cause consumers to delay their purchase of a new computer.

    "It's tough to be optimistic about Christmas" because of the Vista delay, Baker said.

    Shares of both Intel and Apple climbed during after-hours trading

    http://www.washingtonpost.com/wp-dyn/content/article/2006/04/19/AR2006041902538.html
     
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