RSS RSS Twitter Twitter
financial/investor

03/02/2005, 2:55pm, EST

Wednesday, March 2nd

iTunes sales numbers surpassing expectations

Apple has sold approximately 85 million songs in the first two months of 2005, surpassing Piper Jaffray's initial estimates for the entire March quarter. Based on Apple's earlier announcement of 300 million total tracks sold, Senior Research Analyst Gene Munster says that iTunes sales could account for $83.2 million in revenue in the March quarter--or about $35 million more than the firm has been estimating. The firm also believes average daily sales rate has been 1.35 million per day since late January, which very similar to the 1.43 million daily run rate (i.e., sales of songs) in the weeks following the holidays. "We had been anticipating a more significant drop off in iTunes sales from the levels seen in the weeks following the holidays."

In addition to driving iPod sales, the firm says that Apple's iTunes Music Store will also contribute significantly to the company earnings: while it estimtates that the current operating margin on iTunes is in the low single digits, Piper Jaffray says it believes iTunes profitability will begin to increase throughout 2005, with operating margins reaching 5% to 10% in 2006.



"We believe the profitability of iTunes will begin to increase throughout 2005 as fixed costs are spread across greater volumes."


Filed under: Investor

, , 10comments, del.icio.us, slashdot, digg, buzz , Twitter



10 comments
Reader Reactions (Please use <i></i> for italic text)

subscribe to comments
for this article




Expand All   Global Settings
300 million is nothing
0
03/02, 3:51pm, EST
Subscription is the way to go. We support Microsoft technology and everyone knows that to succeed you have to support what Microsoft support. Eventually they will crush our competition for us, and we will start to make money. I just hope Microsoft doesn't turn on us next and snuff us out. --Napster CEO.
Fresh-Faced Recruit
Joined May 2003
User is offline
Clearly...
0
03/02, 4:02pm, EST
...this is the last nail in the Apple corporate coffin. They should be bankrupt in mere days.

(Just thought we'd get that out of the way early on and save everyone else the effort...)

Fresh-Faced Recruit
Joined Oct 1999
User is offline
Obviously
0
03/02, 4:15pm, EST
All those iPods sold during the Christmas season are having an impact. I wouldn't be surprised if the rate slowed down a bit slightly come mid-summer though.
Fresh-Faced Recruit
Joined Jun 2003
User is offline
buymusic.com
0
03/02, 4:30pm, EST
Buymusic.com shall BURY the iTunes Music Store, just wait and see!
Senior User
Joined Jan 1999
User is offline
A visionary gamble
0
03/02, 5:24pm, EST
Given that Apple clears only a few cents for each song sold ("low single digits" margin), a more conservative company would had said "why bother; even if we sell 100 million songs a year that's only a few mill profit." Good thing no one asked me if it would be worth it. :-) Apple's meteoric stock gain over the past year+ is testiment to the success of Apple's entry into the music biz.
Fresh-Faced Recruit
Joined Oct 2004
User is offline
Har!
0
03/02, 5:40pm, EST
Humorous quote: "Buymusic.com shall BURY the iTunes Music Store, just wait and see!"

Even more ironic is that if you go to Buy.com's site, #1 on their "What's Hot!" list is the iPod store. Even funnier is that if you go to their new Yub.com online mall venture, you'll see the iTunes Music Store featured prominently.

More on topic: Looks like things are going well. It's no wonder the record labels are now trying to milk more money out of this venture, now that they realize that people are quite willing to go for an online venture that isn't too restrictive.
Fresh-Faced Recruit
Joined Aug 2001
User is offline
Talk About Sales Volume!
0
03/02, 5:45pm, EST
They're on pace to sell 500 Million songs in 2005. So much for those that said the iTMS would never be a success because it only supports the iPod...
Fresh-Faced Recruit
Joined Apr 2004
User is offline
Umm...
0
03/02, 5:50pm, EST
Gee, you don't think that free songs from Pepsi are affecting the outcome do you?
Fresh-Faced Recruit
Joined Sep 2003
User is offline
The hardware link
0
03/02, 6:36pm, EST
There must be so much pressure on iPod R&D within Apple. If they ever come out with a less cool iPod, then I suspect everthing would crumble badly. Just look at Palm's T5. The only saving grace is on all those locked AAC music files. Those music lovers won't be able to easily abandon their existing music unless they want to start again. Or signing themselves up for a lifetime of monthly subscriptions with Napster and redownload their music collection.
Fresh-Faced Recruit
Joined Dec 2001
User is offline
JEB
Pipe-On, Piper Jaffray!
0
03/03, 12:11am, EST
All of your Piper Jaffray are belong to us!
Junior Member
Joined May 2001
User is offline
Your Comments

In order to post comments: If you are a registered member, please login with your MacNN Forums username and password otherwise please uncheck the checkbox below.


Registered Member?
macnn forums login:

macnn forums password:

Not a member of the MacNN forums? Register now for free.

RSS Feeds

Have the latest content delivered to your desktop via RSS. Use the links below to get access to a specific blog, news, or reviews feed.



  MacNN -all

  MacNN Reviews

  MacNN Podcasts

  iPodNN

  Electronista

  Left Lane News
Want To Sell Your Laptop? Any Condition - receive Top Cash. Get an instant quote. Free shipping www.CashForLaptops.com

Internet Marketing School - 100% Online: Master SEO, SEM, E Commerce, Media & More with a U of San Francisco Certificate.

Buy from The Apple Store, iTunes.com, Amazon.com, TechDepot, OfficeDepot, Computers4Sure, or donate.