Apple iPods drive record sales 

Apple Computer Inc. AAPL.O has introduced a new iMac computer powered by an Intel chip and said iPods helped push holiday sales to a record $5.7 billion, near the top of Wall Street estimates and sending the company's shares up more than 6%.

Speaking at the company's annual Macworld conference in San Francisco, Chief Executive Steve Jobs said the company sold 14 million iPods during the holiday quarter and 42 million to date. He also said the company's online iTunes store has so far sold 850 million songs.

"And it still wasn't enough," Jobs said. "More iPods are on the way."

Apple also introduced new computers based on Intel Corp. chips, the first to result from its decision to switch from IBM PowerPC chips it had used for years.

Jobs told the annual Macworld trade show here the company's new line of iMac computers would come in the same shape and sizes as the existing G5 line of iMacs, with starting prices at $1,299.

The new Apple iMacs are based on Intel Core Duo microchips and are set to begin shipping on Tuesday, the company said.

"The new iMac is two to three times faster than the iMac G5," Jobs said in a speech introducing a range of new products.

Wall Street analysts on average were expecting Apple to post revenue for the fiscal first quarter ending in December of $5.04 billion compared with $3.49 billion a year ago, according to Reuters Estimates. Forecasts ranged from $4.69 billion to $5.85 billion.

The wildly popular iPod devices have quickly gained the lion's share of the digital music machine market and helped send Apple stock up 145 percent since the start of 2005.

"Apple blew away revenue and iPod estimates," Soleil-Cross research analyst Shannon Cross said. "And if you extrapolate the numbers, they will likely beat EPS estimates as well."

Apple has also bolstered its lead with iPod versions, such as the lower-priced Nano and Shuffle. It introduced a video iPod last October along with a deal with Walt Disney Co. to sell television shows such as "Desperate Housewives."

Dell Inc. and analysts have credited the wildly popular devices with reversing Apple's fortunes. Analysts have also said Apple's reemergence in personal computers has hurt Dell sales.

Apple's growth rate in PC sales was the highest among the top five vendors in the third quarter, although it still has only about 4% of the overall PC market.

Apple also said it sold 1.25 million of its Macintosh computers during the holiday quarter when sales at its retail stores were about $1 billion.

Apple shares were up 6.7% at $81.14 in afternoon trading on Nasdaq.