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Analyst: iPod sales hit 23.5 million by 2006

post #1 of 11
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One analyst believes the iPod adoption rate will surge to critical masses over the next 6 years, transforming Apple into a steady 10 billion dollar company and increasing Mac sales along the way.

A leading Wall Street analyst expects 100 million Windows users to own iPods by 2008, Macworld UK is reporting.

In a 27-page research note issued to clients, Needham & Co. analyst Charles Wolf claims the iPod will achieve 'critical mass' that could lead to a surge in Mac sales if only a nominal fraction of iPod users make a Mac purchase.

Voicing his belief that Apple--despite being tight lipped--will soon launch a flash-based iPod, Wolf wrote, "Although we expect hard drive players to capture an increasing share of the portable music player market, flash players should dominate the market through 2006."

Wolf also described Apple's online and brick-&-mortar retail stores as "the unsung heroes of the Apple story." He further predicts that by 2010, iTunes Music Store market share will have fallen to just 2 per cent, but equates this figure to sales worth $800 million per year by then.

Touching on the iPod mini, Wolf said Apple will soon have sufficient margin to reduce the price of the iPod mini from $249 to $199.

He also believes that Apple has successfully transformed itself into a $10 billion company again, predicting Apple to reach 2005 revenues of $11.7 billion, up from the previously assessed $10.2 billion.

"Were forecasting iPod sales of 23.5 million units in 2006," Wolf added.

Several more interesting tidbits, including a valuation of Apple stock, are mentioned in the lengthy Macworld UK report.
post #2 of 11
Looking to 2006 and 2010, with a company as unpredictable and out-of-the-pattern as Apple, seems like pretty wild speculation to me. Tons of iPods leading to more Mac sales makes sense... but the numbers? I'm highly skeptical. (I know all they can do is make their best guess.)

Also... runaway iPod success, but iTunes dropping to 2% market share? The two are an integrated system, and I don't expect that benefit to change if Apple DID allow others to play.

Lastly... "flash players should dominate the market through 2006" ...? What? Flash players don't dominate now. They could IF high-capacity 2-10 GB flash chips get cheaper faster than HDs do. Right now HDs seem to have a strong edge.
post #3 of 11
I should go out and get a job as an analyst, so I can pull in a 6-figure salary and post forecasts that are wildly out of touch with reality, while stating facts about the present market that are patently wrong.

That, or be a "journalist" for one of the major media companies.

Pfft.
post #4 of 11
I believe that the projections for the iPod Division are very hard to project, mainly because there has not been anything similar in recent history to compare it to.

iPods with HDs are selling as fast as they can be made. The U2 iPod is an unknown at this time, but Hot would be a good description and I feel sure that Apple will milk it for all it is worth. As the U2 sales grow there will be other groups, from the Rolling Stones to the Beatles, that will take a serious look at their own iPod. Might even convince Paul & Ringo to go with the flow and drop the suit.

Digital box sets are another new market that I believe will be profitable for a lot of groups, from the Descendents in the punk area to Elton John to any newer group with 100+ songs.

Next comes the flash based iPod (iPod micro) that will cause another backlog while component supplier struggle to ramp up their production. When supply equals demand I anticipate that the iPod micro will have the majority of the market, in part because of the iPod phenomenon and in part because of the elegance of the design.

Then there is the fact that Apple is not going to sit still. GarageBand and Asteroid are two examples of how Apple is going to continue developing this market - and the competition is left trying to catch up. The competition is always going to be at a disadvantage because their corporate culture is not as focused on innovation at near the extent as Apple's is. The advantage is definitely Apples for 3 to 5 years.

Finally there is the Halo effect. For Apple this means that a 5% conversion rate of Window users who own iPods will explode the computer division over the next few years. It will be a rolling conversion, however, as a new iPod owner might not be ready to replace their PC for a year or two. For some this may be pushed up because they "have to have" GarageBand and Asteroid - or whatever Apple cooks up in the next year or two, but I feel the rolling conversion will bring the majority of growth for Apple over the next 5 years.

AAPL at $100. Very probably unless there are external factors, like a terrorist attack, that kicks the entire market down.

All in all, Apple is in for a great ride over the next 5 years and it is going to be a joy to watch - unless you are MS.
Ken
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Ken
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post #5 of 11
Quote:
Originally posted by kenaustus
Might even convince Paul & Ringo to go with the flow and drop the suit.

It was my impression that Apple and Apple had comed to a final understanding recently with respect to the issue of Audio hardware. I would certainly hope so as some of the rumored hardware pluys things like Garageband would need to have earlier agreements amended.

Personally I think Apple the computer company and Apple the record company made some pretty huge mistakes with the very first lawsuits. At this point if there are outstanding issues with Apple and Apple the computer company should just buy out the record company. After all the members of Apple the record company will soon be gone from this little rock we call earth. Hopefully the computer company has plans to survive after Jobs leaves this rock.

Dave
post #6 of 11
Quote:
Originally posted by wizard69
Personally I think Apple the computer company and Apple the record company made some pretty huge mistakes with the very first lawsuits. At this point if there are outstanding issues with Apple and Apple the computer company should just buy out the record company. After all the members of Apple the record company will soon be gone from this little rock we call earth. Hopefully the computer company has plans to survive after Jobs leaves this rock.

Dave

Yeah, nothing like wasting a couple of billion dollars on a record company. No one would complain about this, I'm sure (although it probably will cause hardware prices to rise, once the Beatle's ego distortion field intersects Apple, and they feel they can charge even higher prices for everything). And just because the bandmates will be dead doesn't mean the company will. Its a company with owners, just like Apple computer, and will most likely survive the death of Sir Paul and Sir Ringo.
post #7 of 11
Quote:
Originally posted by kenaustus
Finally there is the Halo effect. For Apple this means that a 5% conversion rate of Window users who own iPods will explode the computer division over the next few years.

Oh, great! Apple can't be bothered to make enough computers for those now who want to buy them, now there's going to be even more potential buyers. Yeah, those backlogs will be cleared up by 2010. (of course if Apple can't get their production act together, all these potential buyers will just go buy themselves another PC instead. I don't know what it is about Mac users, but most people think waiting 2-3 months for a new computer is a little ridiculous.).
post #8 of 11
Well, it's certainly nice to read all these nice things.

However, I take them with as much a grain of salt as I do all of the analysts that predict apple's impending doom
A good brain ain't diddly if you don't have the facts
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A good brain ain't diddly if you don't have the facts
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post #9 of 11
Quote:
Originally posted by Louzer
of course if Apple can't get their production act together, all these potential buyers will just go buy themselves another PC instead. I don't know what it is about Mac users, but most people think waiting 2-3 months for a new computer is a little ridiculous.

That's probably just trolling (clue: "I don't know what it is about Mac users") but to set the record straight, Apple's inability to meet demand on SOME Mac models at SOME times is the fault of IBM's low chip yields--not something Apple or "Mac users" can control or fix. And also not a permanent situation. Bigger chipmakers than IBM are facing similar issues with the move to smaller processes, and all the chipmakers are overcoming those issues. Meanwhile MOST people are getting their Macs promptly.
post #10 of 11
I don't think it is possible for iTMS to lose much(or any) marketshare if Apple's iPod marketshare is only going to increase. No other music service can sell DRM protected music to the millions of iPod owners other than Apple.
post #11 of 11
It's not just this analyst. UBS's recent report also claims such fast growth. Next year, the sales of ipod is expected to be around 11m. This quarter's number will be critical. And also I think that Apple should introduce various ipod products, not just current lineup, to reach the point. Another important factor is to penetrate the international markets. For example, Korea is one of the largest mp3 player markets. To enter into the market, it has to introduce flash ipod with good tech support and aggressive marketing. As for the price, its price is quite reasonable.

Personally, I would like to see full integration of presentation capabilities (support in quicktime, or keynote in iphoto), bluetooth (for remote control) and some sort of input device in current ipod photo.
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