Holiday iPod shortages expected

Apple's iPod digital music player is going to be a colossal hit this holiday season, but there are going to be shortages. How short supplies will actually be is difficult to predict, because Apple is secretive about business practices as well as product supplies, according to BusinessWeek. Some retailers say they're getting far fewer iPods than they requested--in two cases, fewer than half of their weekly orders--and Circuit City expects demand to outstrip supply through the end of the year. The supply of flash memory seems to be one of Apple's shortcomings: Toshiba's chief executive Atsutoshi Nishida said that "unfortunately, we're not able to satisfy 100 percent of Apple's requirements."

The shortages are bringing back old rivalries between Apple and its retailers, as Charlie Tebele, president of Manhattan-based RCS Experience noted. "It's frustrating at times to be a retailer, doing business with Apple," said Telebe. "But as a businessman, I can only admire what they're able to get away with."

Apple yesterday announced that it reached long-term supply agreements with Hynix, Intel, Micron, Samsung Electronics, and Toshiba to secure the supply of NAND flash memory through 2010.

Scott Anderson, merchandising manager for online retailer Crutchfield suggests that "if you want to get an iPod for someone this Christmas, I'd advise you to get it now--if you can find one." Piper Jaffray senior analyst Gene Munster said it's inconceivable that Apple can ship 14.1 million units, and the analyst is considering lowering his current projection of 9.1 million total iPod units sold for the quarter, due to concerns that Apple won't be able to hit his forecast of 5 million iPod nanos, according to a report from BusinessWeek Online.

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