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Video iPod Sees Supply Issues Too
Monday, October 31st, 2005 at 2:00 PM - by Brad Cook
Hot on the heels of constrained iPod nano supplies, the new video-enabled iPod seems to be scarce as well, according to Arik Hesseldahl's latest BusinessWeek column. He noted that with the recent news that Apple has sold over one million videos through the iTunes Music Store, "some investors took the announcement as a suggestion that uptake of the new units is strong."
Mr. Hesseldahl added that "clues are mounting that there simply aren't enough [video iPods] around. It's taking Apple between five and seven business days to fill online orders for the new iPod, according to the company's Web site."
The component most likely constrained is the light-emitting diode backlight that brightens the iPod's screen, iSuppli research analyst Vinita Jakhanwal told Mr. Hesseldahl. She noted that the component is being used in cell phones as well, causing lead times to stretch.
Ms. Jakhanwal also said that adding a second supplier of the iPod's LCD screen "would certainly help meet demand."
As for the number of video downloads, Pacific Crest Securities analyst Steve Lidberg pointed out to Mr. Hesseldahl that "it's a mistake to tie downloads to use on an iPod." The columnist figured that each new iPod owner has downloaded between five and ten videos, putting the number of new iPods sold at somewhere around 100,000 to 200,000 units.
SG Cowen analyst Shawn Slayton told Mr. Hesseldahl that he expects Apple to sell seven to eight million hard drive-equipped iPods next year, out of the 15 million MP3 players with hard drives that he sees the entire industry selling. Mr. Slayton sees 40 million media players with 2GB or more capacity being sold during 2006.
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