Apple shares slide on forecasts

Apple has revamped its computers to attract consumers

Shares in iPod maker Apple have fallen, despite rising profits, as investors fretted about the firm's outlook.

Traders said investors were focusing on disappointing computer sales and a warning that profits for the three months to March would miss forecasts.

The drop came despite profits rising 78% in the three months to 30 December on strong iPod music player sales.

Shares in Apple closed down $5.88, or 6.19%, at $88.83 on New York's technology-focused Nasdaq index.

Analysts said the worry was that the company would struggle to drive strong demand for its products - particularly its Mac computers - following the active Christmas period.

"Our previous thesis on Mac share gains has proven to be too optimistic, and this was a core component of our bullish stance on the shares," said JP Morgan analyst Bill Shope.

He added that iPod shipments may disappoint "as we enter the seasonally weaker period of the year".