iPod holiday sales: Hot or cold?
We’re getting an unusually sharp divergence of expert opinion on how well the iPod is likely to do this holiday season.
The conventional wisdom — reflected in Arik Hesseldahl’s “Apple’s iPod Problem” in Businessweek — is that everybody who wants an iPod already has one, and doesn’t see much reason to upgrade, especially with the economy in the dumps. “As a result,” he wrote, “some analysts believe this will be the first quarter since the iPod was introduced in 2001 that sales will decline from the year-earlier quarter.”
Piper Jaffray’s Gene Munster is one of those analysts. He’s projecting sales of 18.6 million units in Apple’s December quarter, down 16% from 2008 Q1.
A cooling off of this magnitude would mean that Apple’ (AAPL) other business units — chiefly the Mac and the iPhone — need to pick up the slack if the company is to continue the quarterly growth to which investors have become accustomed.
But the reality on the ground, according to Kaufman Bros.’s Shaw Wu, is that iPods are selling like Christmas hotcakes.
In a note issued earlier this week, he reported that Amazon (AMZN), whose giant warehouses tend to have plenty of iPods in stock, was reporting a backlog of several models.
“iPod touch was surprisingly stocked out and now has lead times of 11 days for the 8 GB model and three to five weeks for 16 GB,” Wu wrote. “This is likely due to unexpected strong demand and we find this interesting as iPod touch is Apple’s highest-end iPod.” (link)
Now AppleInsider’s Katie Marsal reports that Apple is “scurrying to restock some of its reseller channels” as those iPod shortages spread.
In a new report to clients issued Wednesday, Wu writes that spot checks are turning up shortages at Best Buy (BBY), Target (TGT), Wal-Mart (WMT) and Crutchfield.com.
“Frankly, we find these sell-outs on iPods surprising, given how difficult the macroeconomic environment is,” he told clients. “From our assessment, we believe iPod is holding up better than most, due to its relatively low [selling price] and strong consumer understanding of the value it provides.” (link)
Wu estimates that Apple will sell some 21 million iPods this quarter — less than the 22 million it sold the year before, but not by much.
not everyone is jump on the apple train.
I love my sansa player like to get it re furb cheap. If something happens to it no big deal.
Same with cell phones My razor 3 t mobile was my recent upgrade just because my old razor took a walk. One more reason not spend big on cell phones. They take walks to easily get lost or stolen. Not worth the hassle of investing in .
As a generation Y-er and having first hand experience in owning the first generation ipod, the 2nd generation nano, the 3rd generation nano, and finally the ipod touch, it’s safe to say that this ipod KILLS every phone and mp3 device out there. Not only is it my portable computer/organizer/wii on the go, but it’s a great complement to any cell phone. I own a Blackberry Pearl and although I am stuck in a contract with T-Mobile, I am going to get an iphone and switch to ATT. I’m pretty sure I can speak for most people my age and in my generation. If you look on youtube alone, you will find tons of kids uploading tutorials and videos on how great the ipod/iphone really are. And you won’t be able to get most Apple users so familiar with the App store to switch over to using the Blackberry store when we already have everything we need. The Apple App Store developers are always listening to customer reviews and creating free updates for everyone who already has that certain app. It’s a no brainer.
I’m happy with the iPhone. I don’t feel the need to store a lot of music. I prefer to listen to it without earphones stuck in my ears, so I’d rather just listen to it from the computer.
It is simple, everyone is now upgrading to the touch because you can access the web anywhere with wi-fi. Not to mention the apps for itouch and iphone rock. You can listen to Pandora though the wi-fi and download songs directly to the itouch. Now that the prices have dropped, it is a no brainer why the have been selling out.
Yet another example of analysts not knowing what they are talking about.
A lot of the people I know are looking to get iPod Touch, or iPhone, and let’s be clear: Everybody has an iPod. So most of the sales that occur are upgrades, just as 90%+ of cell phone sales replace perfectly functional units.
These guys should sit down and shut up.
I’ve had a 16Gb touch for over a year now. I love the thing. But now I need a 120-160 classic for everyday use because of the storage capacity. My 80GB viseo is starting to show it’s age and I’m a little worried about it’s well use hard drive.
Apple celebrates its 25th anniversary continuing to bring innovative new products to market. The iPpod touch is being tracked as a media player but is actually a small handheld computer. It contains a Unix-based operating system (OS X), WiFi, Mozilla-based Safari browser, etc.
At 21 Million units per quarter Apple is now selling two iPods for every Dell Computer. (Dell shipped 10 Million PC shipments for 3Q 2008, Gartner). It would be interesting to see Apple break out the iPod numbers vs. the traditional iPods. Combine that with the Mac and you may have over 10 Million units shipping per quarter.
Now that the iPhone is the #1 selling smartphone for 3Q 2008, and Mac shipments are up 30% vs. Dell sales nearly flat, and their short-lived #1 spot lost to veteran innovator HP, Michael Dell must feel the pain as he watches his factories close while listening to his lame DJ Ditty on his Windows-crashing laptop. Dell products always have and always will suck.
maybe if they would bring the price down to match other types of mp3\video players I might of got one but right now I can get a zune for way cheaper and then send the money I saved filling it up with music
Hi again, Timbo here to tell you all about the BlackBerry app store. Look for it in March. We hired some former Microsoft engineers and developers to make sure that it’s really, really stable. It will be rock-solid, and that’s why it will totally rock!
While I’m here I can also let everyone know that if you run into any ‘Big Buck Hunter Extreme’ app for BlackBerry, it is counterfeit. Please do not download this app onto your Storm, because it can make the accelerometer stop working. Apparently most Storm users have unknowingly downloaded this application.
PS ‘The GAAP Controlling and Cost Accounting Guide to Accrual Schedules, Cost and Work Center Variances, and Labor Utilization Rates Vol. 4.1.24A’ is real. Look for it in March. It is Storm Capable (TM)!
I don’t think Ipod sales will continue this stellar growth. There are affordable alternatives that customers can choose, from companies such as Archos, Meizu, Cowon.. one need only to the research and stop being an brain-dead consumer and buy anything that has a marketing hype premium attached. If the country can vote for Obama.. that means sentiment will turn to alternative valued products… So Microsoft and the rest have a chance.. now they just need to capitalize on it by coming out with the *BEST* feature packed Portable Media Players in the marketplace.. cheaper then comparable Ipod products!
Not for me. I am getting a Zune with the Zune Subscription and keeping 10 drm free songs a month for my collection while letting me listen to whatever I like while i am a subscriber. Better device with better offerings.
I’m totally confused. Wasn’t Timbo bashing BB with the list of apps? And did Scooby not get it or what? Khan didn’t get it either?
Or I got it wrong?
TimboM, let’s try to be a little less obvious that you work for BlackBerry. Everyone already knows that it would be stupid to trust the first generation of BlackBerry apps. iPhone’s apps have proven themselves and Apple and other developers have been testing/clearing bugs for a long time now. I wouldn’t change my iphone for the new BBerry, at least I won’t consider it until BBerry proves it’s able to compete in quality. I switched from the BBerry offered by my company to my iphone so I am able to speak to this.
1) The Storm is a phone.
2) The Ipod Touch is not a phone.
Ipod Touch, even without being a phone, has a map application that can find anything.
What goes with my Dockers is obviously an advertisement disguised as an application, along with your last 3 apps.
And btw, you are waiting till march, while the itouch/iphone can be bought today, with more apps than RIM will ever provide.
Ha ha, no matter how ‘cool’ or ‘hip’ or ’sweet’ the Touch may be, it doesn’t come with all of the new Apps like you will be able to download on the new BlackBerry Storm, including:
* Applebees and Chilis locator
* “What goes with my Dockers(TM)?” fashion guide
* Frequent flyer mileage tracker
* Hampton Inn & Suites “Crazy Biscuits-n-Gravy Rise and Shine!” puzzle game
* GAAP Guide to Cost Accounting for Capital Depreciation (Includes exciting new sections on Calculation of Fully Burdened Labor Rates), Vol. 3
* Hootie and the Blowfish Guide to America’s best sports bars
As you can see, BlackBerry has a lot of fun in store – The BlackBerry App Store – for you!
I can’t wait until next March so I can start getting these apps.
Does anyone know about the discussion at AFB in the intraday thread regarding the phantom tick theory? It looks like they are spotting anomalous events that have a predictive value for trading. Huh?
Analyst Shawn Wu is reporting that iPods are selling so quickly that now there are shortages. 3-5 week wait for some models on amazon.
My checks have turned up similar findings. The Touch has been selling extremely well. Apple may not sell as many iPods as they did last holiday quarter, but Touch sales will be dramatically higher. This is important because the Touch carries a high ASP. The $150 Nano has been the usual favorite, but this quarter sales will be skewed towards the $230 & $300 Touch. Therefore Apple doesn’t have to sell as many iPods for revenue to increase.
The argument “everybody already has one” may be true but it doesn’t apply to the Touch. Sales for the Classic certainly have become more challenging, as well for Nano and Shuffles. Yet, the Touch has significant momentum, and the App Store should continue to provide fuel. I have written extensively about this subject at the Financial Alchemist
I wish AAPL didn’t have to say how many xxxs and yyys they sold, just “we made billions of dollars this quarter – net!” Its like everybody focuses on all this piddly minutiae and not the bottom line – Apple’s a freaking cash machine. They should change their ticker symbol to ATM.
Hey, I got an early Touch for a Christmas present. Cool having a ‘portable computer’. I think between gamers and people who ‘wont get an iphone because we hate ATT’ – touch sales will look good this holiday season.
Sales are red hot for many Apple products, with very few exceptions.
Surprised? Have you actually USED an iPod touch? Best device ever invented. Totally blows away any prior ‘PDA’ type device, and is millions of times ‘cooler’. It just rocks, and the price is VERY affordable–in fact, only $80 more than a Nano!!!
I wish I had a penny for every PC nerd or RIM toting business type who preached DOOM AND GLOOM for Apple. Fact is, Apple is the only tech company worth owning.
This may be an insight into both the holiday season and present quarter apple sales. People are buying small price tag and sale items, which could indicate a trailing off of season sales ending flat. The only danger for apple is that Mac sales may suffer. Last year the top 5 black friday computers sold on amazon were macs, this year there were less. Many analysts dont even realize that the ipod touch can surf the web and under estimate the value of the item.
Phil, do you remember when Businessweek wrote an article titled, “Sorry Steve Apple; Heres why Apple Stores won’t Work.” on May 21, 2001? Maybe you could post a link to it.
ex ped: Here you go: Commentary: Sorry, Steve: Here’s Why Apple Stores Won’t Work
Analysts have been predicting the drop-off in iPod sales for years. Based on the ‘everyone has one’ argument. Eventually they’ll be right.
This article has it correct. You will see a decrease in iPod unit sales. This isn’t too surprising given the millions of iPods being “included in an iPhone”. Apple would rather canabilize their iPod with the iPhone than let someone else do it with another product. But you will see the Touch make a surprise jump percentage of iPods sold and therefore you won’t see a proportional dip in revenue vs. the unit decline. They will be selling more of the higher margin product, which isn’t too bad in this environment.
I must be missing something here. 21mm is less than 22mm, meaning Apple will have – for the first time – sold fewer iPods this quarter than last year’s. I wonder how much steeper the drop will be in 1Q.
Free giveaway like this way hotter:
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