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Analysts Looking at iPod Sales with FUD
Thursday, March 29th, 2007 at 3:00 PM - by John Martellaro
Analysts are always on the lookout for the slightest signs of softness in the growth of the iPod sales. On Friday, Forbes published a piece called "Apple Says Buy Another iPod." which flopped about quite a bit.
The story noted that some customers have seen signs in Apple stores that ask shoppers, "Why stop at just one?" That led to the question of whether Apple thinks it has saturated the market. Or perhaps Apple thinks that customers may be holding out for an iPhone which also plays music.
What's interesting is the observation that analysts and investors have watched iPod sales slip. All along, the estimate for this quarter's sales of iPods have fluctuated, and some have lowered their estimates slightly. If Apple has noted that, it would be natural thing to respond with an ad campaign to bolster sales, but it's very hard to determine what the ultimate result will be.
Perhaps customers are waiting for the iPhone. Perhaps the market is saturating slightly. Perhaps Apple, as the Forbes story noted, has failed to go after the over 40 crowd, ripe for the picking.
One way to look at it is that Apple sold 8.53 million iPods in calendar Q2 last year, and the estimate is for this quarter somewhere in the 10+ million range. Moreover, iSuppli recently predicted serious growth for media player shipments over the next few years. The net result is that everyone is just fishing about, looking for trends that aren't clear yet.
The conclusion is that there is no conclusion to draw. Apple is seeking to increase sales. They always do that. Year over year sales are up dramtatically for Q2. There is some concern about canibalization of iPod sales by the iPhone, but lots of people can afford an iPod shuffle while far fewer can afford to change carriers and buy a US$500 iPhone and pay associated fees.
What we don't know is how Apple will change their marketing and product mix in the future to maintain robust sales. They seem to be awfully good at that.
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