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Apple "roughly on track" for iPod sales

updated 02:35 pm EDT, Tue September 19, 2006

iPod sales may be on track

Apple's new line of iPods is expected to help the company regain some lost marketshare in August and should help the company meet analysts estimates for September quarter iPod shipments. Calling Apple "roughly on track or perhaps slightly light," investment research firm Merill Lynch this morning told clients that while demand for music players in the US remained strong during the month of August with 26 percent year-over-year growth, US sales of the iPod slipped to 19 percent growth over the same period last year. In contrast, Apple saw 22 percent growth in July and 24 percent growth in June, according to NPD data. Apple may have large shoes to fill when comparing September numbers with same period last year, when the company first launched the iPod nano; however, both channel fill considerations and strong notebook sales could offset any potential weakness in iPod sales, Merill analyst Richard Farmer wrote in his research report.

The depleted inventory leading up to the introduction of the iPod nano, should allow the company to fill the channel with new models to help drive iPod sales, he told clients.

According to the firm, Apple would need to achieve about 21 percent year-over-year growth--the average of both July and August--to meet Merill's sales estimates of 8.25 million iPods for the September quarter. Farmer also noted if global sales growth continues to track 7 percent ahead of US NPD data--as it has for the last three quarters--then Apple may be able to meet his iPod sales estimates. The anlayst is also relying the iPod refresh to help drive sales as well.

Merill has a price target of $88 and maintains a 'buy' rating on the stock.




by MacNN Staff

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