The iPod has helped revitalise Apple's fortunes

The company said it has now sold more than 10 million iPods - with almost half those coming in the run up to the important festive season.

Apple said profits for the three months to 25 December were $295m (�156m), up from $63m in the same period in 2003.

It saw sales of $3.49bn, compared to $2bn a year ago, a 75% increase.

The earnings for Apple's first fiscal quarter were the highest quarterly figures in its history and ahead of Wall Street expectations.

Its shares jumped more than 10% in after hours electronic trading to a 12 month high of $72.56.

"I think this momentum that happened last year is going to continue," said Owen Fitzpatrick, at Deutsche Bank.

"Apple is a name in technology that at least for the next couple of quarters will have the wind at its back."

Apple forecasts sales of about $2.9bn for the first three months of 2005.

Brand awareness

On Tuesday Apple launched a cheap version of its Macintosh PC, as well as a new low-cost iPod.

The success of the iPod, which first went on sale in 2001, has helped revitalise Apple's stock price and the company says it now has a 65% share of the hard drive-based portable music market.

Apple said it sold 4.58 million iPods in the first quarter, compared with 2 million in the previous quarter.

Its iTunes music download store is also the market leader and although it now faces strong competition from the likes of MSN and Napster, has helped the Apple brand.

The company, which is bidding to increase its market share of the US PC market from a current 3%, said it had sold over 1 million computers in the quarter.

Company executives are hoping fans of the iPod will be wooed away from PCs running Microsoft's Windows operating system.