Apple's unexpected iPod shortage spreading

[AppleInsider]

Although Macs and iPhones were seen as Apple's ticket to a healthy holiday quarter, the electronics maker has reportedly been struck by surprising demand for iPods and is now scurrying to restock some of its reseller channels.

"What started out as stock outs on the iPod touch at Amazon.com from Black Friday is starting to spread to other retailers and iPod models," said Kaufman Bros. analyst Shaw Wu, who drew attention to the sudden shortages in a report to clients earlier this week.

He notes that Amazon.com, one of Apple's highest volume iPod resellers, has just recently pushed lead times on the 8 GB second-generation iPod touch to three to five weeks from 11 days while the 16 GB model remains at three to five weeks.

In addition, the analyst's distribution and channel checks show that the iPod touch, iPod nano, and even iPod shuffle are seeing spotted shortages on different colors and capacities this week across several retailers including Best Buy, Target, Wal-Mart, and Crutchfield.com.

"Frankly, we find these sell-outs on iPods surprising given how difficult the macroeconomic environment is, putting a crimp on consumer spending," he told clients in a new report Wednesday. "From our assessment, we believe iPod is holding up better than most, due to its relatively low [selling price] and strong consumer understanding of the value it provides."

Despite concerns that iPods may be approaching a saturation point in the consumer market, Wu said the players' recent momentum gives him confidence in his estimate that Apple will sell around 21 million of the devices during its December quarter.

That would represent a 90% increase over the company's September quarter iPod sales and a mere 5 percent decline from last December quarter when sales hit an all-time high of 22.12 million units.

Wu, who maintains a Buy rating on Apple shares, continues to believe the Cupertino-based company is one of the better investments during the tough economy given its strong fundamentals.

"We find the risk-reward favorable for longer-term investors at 12x our calendar 2009 free cash flow (FCF) estimate," he said. "We see upside to our price target of $120 based on a conservative 15x multiple."

Note: While Amazon.com continues to reflect availability of the 8GB and 16GB second-generation iPod touch, sales of those devices are being channeled through its affiliate partners and are not a reflection of its own inventories. As such, iPods continue to dominate the top 13 spots on the retailer's Top Sellers list of MP3 players, helped by discounts of between 8% and 38% on third- and fourth-generation iPod nanos.

[ View this article at AppleInsider.com ]

[walshbj]

5 Weeks?? That could be significant lost sales. I don't want an IOU on the 25th.

[halhiker]

I ordered a pair of iPods (engraved) from Apple on Black Friday and got them both on Monday. They shipped directly from China and got here over the weekend. I guess if you want a Touch, just order direct.

[walshbj]

Originally Posted by halhiker

I ordered a pair of iPods (engraved) from Apple on Black Friday and got them both on Monday. They shipped directly from China and got here over the weekend. I guess if you want a Touch, just order direct.

I got an engraved touch last year for Christmas. It came straight from China, which I find amazing. I realize they come over in a pallet - but it's cool that they can be tracked via FedEx.

[iOrlando]

i was in an apple store on black friday...couldn't move...

those ipod touches are flying like hotcakes...

not everyone wants to pay $1800-$2000 for 2-years of iphone
and have ATT

[robb01]

Originally Posted by walshbj

5 Weeks?? That could be significant lost sales. I don't want an IOU on the 25th.

Thats a very long time

__________

[walshbj]

Originally Posted by iOrlando

i was in an apple store on black friday...couldn't move...

those ipod touches are flying like hotcakes...

not everyone wants to pay $1800-$2000 for 2-years of iphone
and have ATT

Hard to see Apple not ordering enough of these with all the advertising they did - and the momentum the touch is gaining for gaming.

[fabsgwu]

Originally Posted by walshbj

Hard to see Apple not ordering enough of these with all the advertising they did - and the momentum the touch is gaining for gaming.

I think also people are also delaying a new computer purchase by relying on mobile OS X (iPod Touch and iPhone).

[Wonderkid]

...we bought one of these to use as a sales tool - using the photo and video viewer to demonstrate our products. Works a treat - and a lot less to carry around than a laptop! Anyway, thought I would try some apps. Downloaded about 15 (at a total cost of about £10 - not bad!) and the good ones are excellent, including Flick Fishing - a total treat. Even without the apps, with the exception of the appalling usability of the key feature - the music playback (my Nokia E71 music player is a LOT easier to navigate with one hand), the Touch is a super PDA and now a great gaming device. Best of all, unlike the iPhone, it is tariff free, has great battery life and is a lot thinner too. Am convinced the iPod Touch is Apple's trojan horse into the future of communications too - P2P wireless! Death to the networks! You ARE the network!

[TBell]

My brother bought an iPod Touch recently and brought it over to play with. I am a big fan. First, he used it find out where my house is located. The iPod did this by triangulating Wi-Fi hotspots. It was very accurate. We then used that to find directions somewhere else. Second, he then used voice over IP to talk to his girlfriend. Third, we played a few free games that he has on the iPod Touch. Fourth, he used some app to find a great pumpkin pie recipe for my girlfriend. Fifth, we used the calculator. It is a great tool.

Originally Posted by Wonderkid

...we bought one of these to use as a sales tool - using the photo and video viewer to demonstrate our products. Works a treat - and a lot less to carry around than a laptop! Anyway, thought I would try some apps. Downloaded about 15 (at a total cost of about £10 - not bad!) and the good ones are excellent, including Flick Fishing - a total treat. Even without the apps, with the exception of the appalling usability of the key feature - the music playback (my Nokia E71 music player is a LOT easier to navigate with one hand), the Touch is a super PDA and now a great gaming device. Best of all, unlike the iPhone, it is tariff free, has great battery life and is a lot thinner too. Am convinced the iPod Touch is Apple's trojan horse into the future of communications too - P2P wireless! Death to the networks! You ARE the network!

[Alonso Perez]

...just last week. The Touch makes a lot of sense. It's an amazing machine at a ridiculous price, if you think about it. Plus now it can even do VOIP now.

I'm surprised they did not foresee the demand.

I think Apple underestimates how much of a problem having the iPhone locked to cell providers around the world is. A lot of people just don't want to be locked in like that. Nobody likes cell phone providers and their billing practices, and not everybody is going to fiddle with unlocking. The Touch is just an easy way to skip the problem altogether.

[teckstud]

Originally Posted by walshbj

Hard to see Apple not ordering enough of these with all the advertising they did - and the momentum the touch is gaining for gaming.

Also the reviews for the 2nd gen Touch were much more positive than the 1gen. The sound, look and price are so much better. It clearly is a leader for Apple. And again - no AT&T.
I ordered another one black friday for a gift. I've had mine for a month and am lovin' it! No complaints - and definitely no whines that I don't have google street view.

[teckstud]

Originally Posted by walshbj

Hard to see Apple not ordering enough of these with all the advertising they did - and the momentum the touch is gaining for gaming.

Also the reviews for the 2nd gen Touch were much more positive than the 1gen. The sound, look and price are so much better. It clearly is a leader for Apple. And again - no AT&T.
Love mine - ordered another as a gift. No complaints here and no whines for google street view either.


UPdate- Fedex just arrived. He says he's been delivering these small boxes all morning. NYC loves Apple.

[jwdawso]

I got my daughter an iPod Nano (Yellow) on black friday (Apple online), so I did my part. She has a 1st & 3rd generation nano, but needs/wants 16GB for movies. So she will do her part by buying more movies/music videos off of iTunes (as well as music).

I was also in an Apple Store on black friday - very busy.

Also - I clicked on the Amazon link - first 12 are iPods, 16 of the first 20 are iPods, and the first Zune is 24. Wow!

[dasein]

Originally Posted by Alonso Perez

I'm surprised they did not foresee the demand.

Maybe they've got something new for January and want inventory flushed??

[teckstud]

Originally Posted by dasein

Maybe they've got something new for January and want inventory flushed??

I think a lot of us just waited- didn't particularly care for the 1st gen (no speaker, bad screen, too expensive, etc) and pounced on the 2nd gen Touch.

[Eriamjh]

With Apple it seems to be feast or famine.

I just wish the stock would go back up!

[agent59518279]

Now we know why Steve Wozniak is a loser: check this out

[Charko]

As well as the above-mentioned advantages that the touch has over the iPhone, it is also FASTER.
Games and other programmes run more smoothly. This has now been proved in tests.
The iPhone's processor is tuned at about 412 MHz as opposed to the touch's 512 MHz.
This was probably done to conserve the iPhone's battery.

[Charko]

No matter, I love my 32 GB touch!

[teckstud]

Originally Posted by Charko

As well as the above-mentioned advantages that the touch has over the iPhone, it is also FASTER.
Games and other programmes run more smoothly. This has now been proved in tests.
The iPhone's processor is tuned at about 412 MHz as opposed to the touch's 512 MHz.
This was probably done to conserve the iPhone's battery.

Wow- that's amazing. Where do you read that?

[walshbj]

Originally Posted by dasein

Maybe they've got something new for January and want inventory flushed??

That occurred to me, but Christmas isn't the time to be short on inventory - especially on behalf of an unannounced product.

I've said this before - the iPod touch is the best handheld device I've ever had. By far. But it needs a couple things, like connectivity for a card reader.

[teckstud]

Originally Posted by Charko

As well as the above-mentioned advantages that the touch has over the iPhone, it is also FASTER.
Games and other programmes run more smoothly. This has now been proved in tests.
The iPhone's processor is tuned at about 412 MHz as opposed to the touch's 512 MHz.
This was probably done to conserve the iPhone's battery.

And the Touch and not the iPhone takes the new headphones.
And Nike +.

[Charko]

Originally Posted by teckstud

Wow- that's amazing. Where do you read that?

I wish I could remember; I think it was an article in MacDailyNews about two or three weeks ago.
But I remember that the results were based on serious and empirical tests.

[solipsism]

Originally Posted by Charko

I wish I could remember; I think it was an article in MacDailyNews about two or three weeks ago.
But I remember that the results were based on serious and empirical tests.

Just Google it. I think AI was the only tech site not to post anything about it.

[SpamSandwich]

Originally Posted by teckstud

I think a lot of us just waited- didn't particularly care for the 1st gen (no speaker, bad screen, too expensive, etc) and pounced on the 2nd gen Touch.

Sums up my reason for buying the 2nd gen touch.

Most people I've talked to still call it the "iTouch" though. The name is awkward for folks to remember.

[Charko]

Originally Posted by solipsism

Just Google it. I think AI was the only tech site not to post anything about it.

OK, I've googled it, and the difference is greater than I'd thought:-

iPhone: 412 MHz
touch: 532 MHz

Here's the site:- http://toucharcade.com/2008/11/23/2n...r-than-iphone/

[nonstopdesign]

Originally Posted by Alonso Perez

I think Apple underestimates how much of a problem having the iPhone locked to cell providers around the world is. A lot of people just don't want to be locked in like that.

Sure, sure, but maybe you missed the headline: iPhone best selling smart phone in the US.

[sflocal]

Originally Posted by agent59518279

Now we know why Steve Wozniak is a loser: check this out

Hmm.... I'm curious what kind of standards you are using to judge the Woz a loser. Should we use your bank account versus his as a comparison?

He co-founded Apple. Without him, Apple would never have been in existence.

Woz may certainly not be 100% correct all the time, but even Steve Jobs has been known to make a few wrong predictions from time-to-time.

Is this how you start your first post? What a waste. The first impression is always the most important. You receive an 'F'.

[melgross]

Originally Posted by Wonderkid

...we bought one of these to use as a sales tool - using the photo and video viewer to demonstrate our products. Works a treat - and a lot less to carry around than a laptop! Anyway, thought I would try some apps. Downloaded about 15 (at a total cost of about £10 - not bad!) and the good ones are excellent, including Flick Fishing - a total treat. Even without the apps, with the exception of the appalling usability of the key feature - the music playback (my Nokia E71 music player is a LOT easier to navigate with one hand), the Touch is a super PDA and now a great gaming device. Best of all, unlike the iPhone, it is tariff free, has great battery life and is a lot thinner too. Am convinced the iPod Touch is Apple's trojan horse into the future of communications too - P2P wireless! Death to the networks! You ARE the network!

I don't know if I now want to be the network. My wife and daughter already call me the systems administrator. That's enough!

[halhiker]

Originally Posted by jwdawso

I got my daughter an iPod Nano (Yellow) on black friday (Apple online), so I did my part. She has a 1st & 3rd generation nano, but needs/wants 16GB for movies. So she will do her part by buying more movies/music videos off of iTunes (as well as music).

I was also in an Apple Store on black friday - very busy.

Also - I clicked on the Amazon link - first 12 are iPods, 16 of the first 20 are iPods, and the first Zune is 24. Wow!

Amazon seems to have plenty of Zunes available as did my local Target.

Target, BTW, has the Touch in stock online and in store with a $25 gift card with purchase promo.

[alansky]

How in heaven's name do you run out of iPods coming into the number one, mondo shopping season of the entire year??? Heads will roll if this story is true.

[melgross]

Originally Posted by teckstud

Also the reviews for the 2nd gen Touch were much more positive than the 1gen. The sound, look and price are so much better. It clearly is a leader for Apple. And again - no AT&T.
Love mine - ordered another as a gift. No complaints here and no whines for google street view either.


UPdate- Fedex just arrived. He says he's been delivering these small boxes all morning. NYC loves Apple.

When I'm on the subway, I can't always tell if they're iTouches or iPhones, but I do see an awful lot of them here. When I take mine out, and glance around, I almost always see at least one other in the car (the part that I can see). That's amazing. iPhone or iTouch, they're becoming almost as ubiquitous as a regular iPod here.

And, yes, I did see my fourth Zune in the wild last month. Yea Microsoft!

[melgross]

Originally Posted by teckstud

Wow- that's amazing. Where do you read that?

It's true.

I would think that because it doesn't have the on all the time phone, and esp. the 3G, the battery life would be much better, so they are using some of that to speed up the processing instead. Seems like a good move.

What would be really cool would be if they gave the user the choice of even greater battery life when using the iPod, by switching the speed down.

[melgross]

Originally Posted by nonstopdesign

Sure, sure, but maybe you missed the headline: iPhone best selling smart phone in the US.

Also, they're well ahead of their worldwide goal of selling 10% of smartphones, or 1% of total phones, as the worldwide sales of the iPhone is now 16.6% of all smartphones.

Nokia is being hurt the most, as their percentage sales of smartphones has dropped by 40% the past year.

[melgross]

Originally Posted by sflocal

Hmm.... I'm curious what kind of standards you are using to judge the Woz a loser. Should we use your bank account versus his as a comparison?

He co-founded Apple. Without him, Apple would never have been in existence.

Woz may certainly not be 100% correct all the time, but even Steve Jobs has been known to make a few wrong predictions from time-to-time.

Is this how you start your first post? What a waste. The first impression is always the most important. You receive an 'F'.

Well, you know, it does seem as though Woz is acting more like a curmudgeon the older he gets. Sometimes I can't understand what he's saying. He seems to enjoy baiting Apple these days.

I even wonder if he means half of what he says, as he's such an avowed practical joker.

[quinney]

Originally Posted by alansky

How in heaven's name do you run out of iPods coming into the number one, mondo shopping season of the entire year??? Heads will roll if this story is true.

It appears AAPL bought into the hysteria about the bad economy, to some extent, and
decided that too little inventory would be preferable to too much inventory. They seem
to be able to adjust their production pretty quickly though.

[melgross]

Originally Posted by alansky

How in heaven's name do you run out of iPods coming into the number one, mondo shopping season of the entire year??? Heads will roll if this story is true.

We've all read the articles saying that Apple's suppliers have seen cutbacks from Apple going into the holiday season throughout all their lines.

I would expect that Apple, as other companies, has felt that holiday sales this year would be down because of the deepening recession worldwide, and cut back. It's always a dance to guess just where sales will be.

Apple has always been conservative this way. Except for when they have the rare product failure, they are always short. Back in late 1991, when I bought my 950, I had to wait almost four weeks!

As Jobs has said in the past about this issue; Companies would rather have too little inventory, with customers not finding the product in some cases, than having product sit on the shelves not selling.

It's a problem many companies would love to have. Right now, I'm pretty certain that Dell would give up Michael's right arm to have this "problem".

[JeffDM]

Originally Posted by walshbj

5 Weeks?? That could be significant lost sales. I don't want an IOU on the 25th.

Originally Posted by robb01

Thats a very long time

If you're being sarcastic, you're right to be. It isn't a long time, but giving the actual gift has a lot better feel than giving them a printout of the order confirmation.

Originally Posted by fabsgwu

I think also people are also delaying a new computer purchase by relying on mobile OS X (iPod Touch and iPhone).

There is some overlap in functionality, but I don't really see them as substitutes. OS X mobile is a single-tasking device for battery life reasons, and task switching is slow. The hand held form factor also forces on user interface limitations, iTouch and iPhone are about the best there is, but they're still tiny. I own a notebook and an iPhone for different reasons.

Originally Posted by alansky

How in heaven's name do you run out of iPods coming into the number one, mondo shopping season of the entire year??? Heads will roll if this story is true.

I don't know about that, predicting surges in demand can be hard. When Apple introduced the nano, it sounds like they blew past all their sales expectations, to paraphrase Jobs, they took a big leap of faith to order boatloads of them and they sold almost all of them right away, it sounded like they felt lucky.

[ktappe]

Originally Posted by alansky

How in heaven's name do you run out of iPods coming into the number one, mondo shopping season of the entire year??? Heads will roll if this story is true.

My best guess is that Apple product forecasters believed all the news stories about consumers not spending. Problem is, those stories all seem to have been wrong, as Black Friday sales were up 6%. People are buying, recession news or no recession news. I'm not sure anyone really knows what's going on, but Apple bet wrong, ordering less stock from suppliers in China, and now they're getting bit.