Analyst take on Shuffle

Despite the higher price of the third-generation iPod shuffle launched Wednesday, the new features, capacity and form factor could prove attractive to customers, according to Kaufmann Brothers analyst Shaw Wu. "We believe iPod shuffle could end up being a surprise hit," he said, noting that Apple tends to see a substantial increase in sales when it makes a form factor change to either iPods or Macs.

Although Apple took a risk by increasing the price point of its entry-level iPod, the storage capacity has been upgraded to 4GB. Customers now will pay $20 per GB instead of $50 and $35 per GB for the previous 1GB and 2GB models, respectively.

The new Shuffle is thinner and longer than the previous designs, with in-line volume and track controls replacing the surface buttons. A VoiceOver feature now vocalizes the track, artist and playlist information when a button is pressed.

Wu estimates that the Shuffle accounts for between 10- and 30-percent of all iPod shipments each quarter. Street forecasts expect the company to sell between 9- and 10-million units for the March quarter.

by MacNN Staff