Apple Computer Inc. confirmed yesterday that a new iPod division had been set up at the company, splitting the Macintosh and iPod hardware segments. While Apple said this would allow the company to focus resources on the iPod, analysts believe it solidifies the importance of the iPod within Apple and could be the start of something bigger for the company, such as the release of other digital devices. "By creating an iPod division, Apple is establishing the device's relevance is much more than just playing music," said Jupiter Research Senior Analyst Joe Wilcox. "Apple is recognizing iPod as an integral part of the company's product line and an important contributor to the revenue mix." Longtime Apple Vice President Jon Rubenstein, will head up the new iPod division, while Tim Cook Apple's executive vice president of Worldwide Sales and Operations, will lead the new Macintosh division. "This organizational refinement will focus our talent and resources even more precisely on our industry-leading Macintosh computers and the wildly successful iPod," Apple said in a statement. In its most recent financial quarter, Apple sold 807,000 iPods, a 909% increase over the same quarter a year ago and 10% more than it sold during its last record-setting quarter. That provided a total of about $264 million in revenue for Apple. In comparison, Apple sold 217,000 iMacs and eMacs combined for the same quarter, accounting for $252 million in revenue. "It (setting up the iPod division) does not surprise me," said Technology Business Research Analyst Tim Deal. "The iPod has taken an integral role in Apple's product strategy, much like the colorful iMac did when it brought the company back from the brink of disaster in 1998. But now, the iPod is accounting for nearly 14% of the company's total revenue, while the iMac has dropped to 13%. It makes sense to focus on a product that's easier to manufacturer, ship, and market than a computer -- especially if it's yielding higher revenue and gross margins that I estimate to be near 23%." Source: Computerworld