Apple Whistles a Happy 3 Billion iTunes
07/31/07 - 02:03 PM EDT
Daniel Del'Re
The iPhone is Apple's best bet to raise the average selling price of its portable hardware products. The company said that the $599 iPhones sold at a greater clip than the $499 models, which have less memory for digital content.
The base of people using iTunes and iPods is also a critical source of potential buyers for Apple's Mac computers. Analysts and investors have touted the iPod's ability to introduce consumers to Macs, which hold just about 6% market share in the U.S. and about 3% globally. Mac sales leapt nearly 36% in the third quarter and accounted for 47% of total revenue, up from 43% a year earlier. Many analysts refer to this as the "iPod halo effect," but also recognize that Macs have a chance to gain market share as the trend in user generated video content picks up. Macs are considered to be more user-friendly for creating and editing digital home movies, photos and other content exchanged over the Internet or posted to blogs. Fati Naraghi, director of technology research at mutual fund manager Newton Investment Management, described Apple as a "long-term play on the growth in consumption and production of video content." Newton holds Apple shares in some funds.
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