Napster raised its fourth quarter revenue guidance Thursday by a million dollars, citing robust growth in its subscription service. The news sent shares of Apple plummeting, dropping as much as 7% earlier today in extremely heavy trading.
Napster said it expects revenue to come in at about $15 million for the quarter ending March 31.
"Since the launch of Napster To Go, we have experienced exceptional demand for all aspects of our business. Our new marketing campaign is already delivering strong returns by generating unprecedented interest in both our regular and portable music subscription offerings," said Chris Gorog, Napster chairman and CEO in a statement. "A positive reception to compatible MP3 players from iriver, Creative and Dell is also fueling demand."
Shares of Napster are trading up about 10 percent today, while Apple is trading down about 5 percent. Napsteris announcement came just one day after Apple announced that it had sold 300 million songs to date, with one analyst saying he expects Apple will have sold 85 million tracks in the current quarter and could start reaping a steady profit from the iTunes Music Store in 2006.