Apple announced fourth quarter financial results with revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. Profits were up four times from the year before, comparing to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter. Gross margin was 28.1 percent, up from 27.0 percent in the year-ago quarter, Apple said. International sales accounted for 40 percent of the quarter’s revenue.

The result have been called "phenomenal" by analysts in the San Francisco Bay Area in which Apple is headquartered, but still fell shy of some analyst's expectations. The questions seems to be "how long can Apple sustain growth with the iPod?"

Apple CEO Steve Jobs demonstrated the company's continued aggressiveness in this market with the announcement of the Video iPod, dubbed "the Madonna iPod" by local television media, as the announcement comes at a time when Apple is promoting the 80s pop-star icon's complete work. The new video iPod has a 2.5-inch color display and looks like an update of the classic white iPod, Jobs said at an event in San Jose, California, that the company was calling the "One more thing'' event.

The announcement also follows by a day the revelation that Microsoft and Real Networks have settled their grievances, both companies having identified Apple as their true competitor in the emerging space for digital entertainment content. It is also the second iPod announcement in a month, following the recent Nano announcement--Jobs said this week that Apple is having trouble meeting demand for this item (which brings back shades of Apple Past, when it had trouble filling orders for certain popular Macs a decade ago).