Million songs sell in first week
Advertiser News Services
SAN JOSE, Calif. — Apple Computer Inc. said yesterday that it exceeded record industry expectations by selling more than 1 million songs since the launch of its online music store a week ago.
"Our internal measure of success was having the iTunes Music Store sell 1 million songs in the first month," said Doug Morris, CEO of the Universal Music Group. "To do this in one week is an over-the-top success."
The sales affirm what analysts and industry executives have said of the Apple iTunes Music Store — that it's one of the most consumer friendly methods yet of buying songs electronically and legally.
Songs are 99 cents per download, and unlike competitors the Apple service has virtually no copy protection. Customers can keep the songs indefinitely, share them on as many as three Macintosh computers and play them on any number of iPod portable music players. No subscriptions are necessary and buyers can burn unlimited copies of the songs onto CDs.
The company also sold 20,000 of the newest iPod models over the weekend and received more than 110,000 orders.
Apple CEO Steve Jobs won licensing deals with all five major record labels to open the online music outlet — a coup that other industry-backed, subscription-based online services obtained only recently after more than a year of stagnant sales.
The iTunes Music Store launched April 28 with 200,000 tracks. About 3,000 more songs will be added today, Apple said.
Shares of Apple rose 11.4 percent yesterday, gaining $1.64 to close at $16.09 each on the Nasdaq Stock Market.
More than half the music sold was purchased as albums, dispelling concerns that selling music on a per-track basis would reduce album sales, Apple said.
"In less than one week, we've broken every record and become the largest online music company in the world," Jobs said.
Jobs, who regained control of the company in 1997 after two years of losses, helped turn Apple around by focusing on PC design and software tailored for tasks such as managing digital music and photos. Jobs is relying on new products to spur demand at a time when many users see little reason to buy new computers.
Enthusiasm for Apple's new products typically swells soon after they are released, making it tough to determine how much the music store will add to sales and profit yet, analysts said.
"It's hard to draw any conclusions based on one week," said Andrew Neff, an analyst at Bear Stearns & Co. who rates the shares "peer perform."
The music store is available to a small share of PC users.
The Cupertino, Calif.-based company, the only PC maker that builds an operating system that competes with Microsoft Corp.'s Windows, accounted for about 3 percent of U.S. PC shipments in the last three months of 2002.
Apple plans to make the music store available to Windows users by year's end and is negotiating with record companies to sell music to customers overseas.
