Analysts: Effect of iPod shuffle price cut is a wash

More iPods will leave the store at a lower average sales price, for no net gain.

That, in a nutshell, are the conclusions of Piper Jaffray's Gene Munster and American Technology Research's Shaw Wu today as they assess the reshuffling of Apple's (AAPL) entry-level iPod line on Tuesday, when the company cut the price of the 1GB iPod shuffle from $79 to $49 and introduced a new $69 2GB shuffle. See here.

Munster notes that that $79 price point was remarkably durable, having held for more than 500 days. That's pretty impressive, considering that after the shuffle first appeared three years ago at $149, its price dropped every five to eight months. He now expects the average selling price of a shuffle to fall from $67 to $55 while iPod unit sales increase 15% — neutralizing the effect of the price cut. He's standing pat with his estimate of 11.3 million iPods sold in the March quarter.

Wu points out the obvious: that if Apple had cut its shuffle prices before Christmas, not after, it might not have missed its consensus sales numbers by 2 or 3 million iPods. But he's a great believer in price elasticity, and he expects the new entry point will bring in new customers to the tune of 500,000 to 1 million extra units per quarter. "However," he concludes, "we are not changing our estimates as our iPod unit assumptions were arguably aggressive prior to this price cut and we frankly remain concerned with US consumer spending trends."

One thing on which Munster and Wu don't agree is where Apple's share prices are headed. Munster, always bullish, is sticking to the $250 target he's maintained since last October. By contrast, Wu in late January dropped his 6-12 month target from $210 to $175, and he's sticking with that.