IPod sales fell to 8.5 million from its record of 14 million in the prior quarter, but that was an expected seasonal drop after the free-spending holiday period. However, revenue from iPods, at $1.7 billion, outpaced revenue from computers at $1.57 billion. Apple has said it intends to switch its entire computer line to Intel microprocessors from IBM Corp. and Freescale Semiconductor Inc. by the end of the year.
"They make more money on iPods than computers, and make more iPods by a factor of 8," Gartner's Reynolds said. "You can see how important the iPod is. Part of the challenge is finding new areas to grow, and the big story with Apple is personal entertainment devices."