Analyst on iPod successors, iPhone price cut

Apple's new iPod shuffle, iPod nano, iPod classic, and iPod touch portable players are worthy successors of the company's previous models, according to American Technology Research senior analyst Shaw Wu. "From our assessment, we find the feature sets and price points well differentiated and believe this will help minimize cannibalization among product lines and vs. iPhone." Wu believes the new iPod nano "fatboy" could perform like last year's re-designed iPod shuffle, which was a run-away seller. The analyst also sees a favorable trend with Apple's $149 and $199 prices vs. the $79 iPod shuffle. Apple's iPhone price cut also made headlines yesterday, angering some customers who purchased the pricey handset in recent weeks.

Apple boss Steve Jobs said his company won't give customers refunds for purchasing iPhones at $200 higher than yesterday's new rate, and skirted an apology with the response of "that's technology." Jobs suggested iPhone customers who purchased their device as early as yesterday return to the store to talk about potential refunds, but said iPhone owners who bought their phones a month ago are experiencing "what happens in technology."

Wu believes the iPhone price cut is positive for the Cupertino-based company, and that the move was necessary for Apple's success.

"We have had reservations with its high price point and are glad to see Apple address this problem. In addition, we believe this lower price is necessary to reduce cannibalization with the new iPod touch, which is essentially a thinner iPhone without the cell phone, e-mail, and Bluetooth."

The analyst admits however that his one concern with the price cut remains those customers who paid $599 for the device.

American Technology Research still recommends purchasing APple shares on pull-backs and expects an upside to the company's stock price to $185 in six months to one year.

Starbucks partnership worth watching

Wu also addressed Apple's new partnership with Starbucks, saying the deal is worth watching as a result of free WiFi connectivity combined with WiFi-capable Apple devices and the iTunes WiFi Music Store.

"Basically, Starbucks will allow free WiFi access to the iTunes WiFi music store to customers using an iPod touch, iPhone, or iTunes through a Mac or PC. Users will then be able to download music directly to their mobile devices. We find this cross-selling interesting and likely to increase brand stickiness for both companies."