2G shuffle, iPod sales

Steady second-generation iPod shuffle sales could boost iPod sales for Apple in November and December, potentially resulting in higher numbers than industry watchers initially predicted. Senior analyst Gene Munster of Piper Jaffray today wrote that while it is too early in the quarter to know how sales of the new Shuffle will impact numbers, checks show that initial interest is strong. "If Apple is able to ramp supply to indirect channels, our estimates could be low," Munster wrote in a research note obtained by MacNN. The analyst notes that checks with 40 'big-box' retailers show store clerks suggesting iPod purchases 70 percent of the time, and that checks with 20 Apple retail stores show 100 percent have more than 50 shuffles available heading into the busiest shopping week of the year. "Apple is targeting price sensitive markets with the $79 shuffle," Munster said. "Since the shuffle was not released until November 3rd, the player will likely have a material impact on the November and December NPD data and our current expectations could prove to be low."

Checks with retail stores showing clerks suggesting iPods to customers 70 percent of the time also revealed that they are suggesting iPods to customers more than they used to. When asked to suggest an MP3 player for less than $200, 70 percent of clerks suggested an iPod, which jumped from 52 percent in June of 2005 and 38 percent in November. Checks in the retail channels for the second-generation iPod shuffle also showed supply outweighing demand, and that while Apple has maintained inventory at its retail outlets, many of the 40 big-box retailers as well as online vendors such as Amazon.com and Target.com are sold out of the player. One Amazon.com affiliate, BlueProton, is even selling the player at a $30 premium.

The iPod shuffle is the only player not shipping within 24 hours from Apple's online store, according to Munster, and checks with 20 Apple retail stores showed that 100 percent have more than 50 Shuffles in stock heading into the busiest shopping week of the year.

"Once again, Apple seems to be keeping the inventory of its hot new items within its direct channel until it can ramp up enough supply to cover both direct and indirect," the analyst wrote. "iPod Unit Data Suggests 14-15 million For December 2006. While it is way too early to make a call on December 2006 iPod results, our analysis of the first month of NPD data (October) for the quarter suggests iPod units of 14-15 million."

by MacNN Staff