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Merrill Lynch: hard drive shortage likely constraining iPods

post #1 of 13
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In a research report released late last month, Merrill Lynch analyst Steven Milunovich said Apple is expected to sell nearly 4 million iPods in the December 2004 quarter. The analyst also reiterated his 'buy' rating on Apple with a 12-month target price of $78.

The report offered anecdotal observations about iPod sales in the US and Japan, Mac market share growth in 2005, and even more stock strength driven by "optimistic" sales numbers of the iPod. "We expect a strong iMac season to be followed by share gain in 2005," Milunovich wrote.

Offering strong evidence about the popularity of the iPod around the US and other countries, Milunovich said that despite the growing number of "iPod challengers," Apple's share in the digital player market is increasing. With Apple expected to enter the flash-based digital music player market in the near future, Apple could potentially double its iPod-based revenues, the report states.

Milunovich wrote that Apple could sell as many as 4.5-5.0 million iPods in an "optimistic" scenario, but supplies of iPod drives would likely stunt a further increase in sales. "We estimate that drive production for iPod in the quarter was about 4.2 million, which was augmented by 1.4 million drives in inventory," he said.

The report notes that demand for the iPod is strong and that it is the most searched item on Shopping.com, a popular comparison shopping site. Augmenting the prevailing notion of an iPod shortage, Milunovich said that Amazon.com was backordered on the 20GB model and was sold out of green and gold iPod mini models and that there were "spot shortages" of some of the models at other non-Apple retails. However, Apple retail and online stores were reported to have ample supply of the music players.

Merrill Lynch noted that Apple is strongly pushing the iPod in Japan where some trains are "plastered with Apple advertising." Tokyo's "Best Buy" counterpart, Bic Camera, is also reporting that the iPod is their hottest seller. Meanwhile, local consumer rankings for Sony's competitive HDD Walkmans are reportedly quite low.

The report noted that Apple's iPod market-share gains are also in part due to its retail strategy. "At the new store in London there was a line of 110 people waiting to pay last Saturday," Milunovich wrote. "The Sony store nearby was relatively empty."
post #2 of 13
Mr. Milunovich could simply sum everything up in one statement: "Despite any perceived strength of competitors to the iPod in the US and abroad, Apple has succeeded in turning the iPod into the de facto portable music player." The explicit and implicit marketing of the device is strong enough that anyone getting a non-iPod this Christmas will be disappointed. I agree that flash-based players will add more breadth to Apple's dominance in the market and in the hearts and minds of consumers.

I don't understand how competitors think that adding an FM antenna is a great feature. What listen radio I listen to is rarely ever in the FM spectrum. If you need to listen for traffic updates, just wait until you're in the car. The whole point of a music player that stores thousands of songs is to bypass the vast wasteland of music radio.
post #3 of 13
Quote:
Originally posted by Squirrel_Monkey
I don't understand how competitors think that adding an FM antenna is a great feature. What listen radio I listen to is rarely ever in the FM spectrum. If you need to listen for traffic updates, just wait until you're in the car. The whole point of a music player that stores thousands of songs is to bypass the vast wasteland of music radio.

That is pretty much how I see it.
post #4 of 13
Well they gotta offer something different. So, FM tuner is one of them.
'L'enfer, c'est les autres' - JPS
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post #5 of 13
The thing I most love about my iPod is that it has freed me from FM radio. That to me is the point of being able to take your own music along-- it replaces radio.

I'm sure there's plenty of people out there that would see an FM tuner as a plus, but at what cost? WMA? Bad styling? Crappy interface? Any other player is definitely seen as a trade-off in these areas next to an iPod.

Do what you will, but harm none.

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Do what you will, but harm none.

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post #6 of 13
So what should they offer then? Mini missiles?

They already have something VERY distinc from the iPod (some of them). They can play videos. FM tuner is just another 'extra feature' so people would be impressed with many 'features' they offer. They know that not a lot of them will use the FM, but they want to have it there to testify that it has more features then the iPod.

Now, if those features are good or necessary is a choice individuals will have to make. But not all of them can have the same design as Apple and same name, formats, et al. So they give something else to the consumer.
'L'enfer, c'est les autres' - JPS
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post #7 of 13
The argument for an FM tuner:

1. I take my iPod to the gym.
2. My gym has several television sets showing TV shows, news, and sports.
3. You can only listen to these TV shows by tuning into certain FM stations on your dial... each television requires you to turn into a different FM radio station (usually low numbers on the dial, like 88.1, 88.3, etc.)

In fact, this is fairly common at most gyms. Every gym I've seen has this.

Apple: bring FM Tuning to the iPod, please!!!
post #8 of 13
Quote:
Originally posted by scotty321
The argument for an FM tuner:

1. I take my iPod to the gym.
2. My gym has several television sets showing TV shows, news, and sports.
3. You can only listen to these TV shows by tuning into certain FM stations on your dial... each television requires you to turn into a different FM radio station (usually low numbers on the dial, like 88.1, 88.3, etc.)

In fact, this is fairly common at most gyms. Every gym I've seen has this.

Apple: bring FM Tuning to the iPod, please!!!

I could agree.. I like to listen to talk radio on AM and I hate it when I have to get out of the car when there's a topic of interest being tossed around at the time. For that reason I agree.. but to listen to FM radio stations.. go buy a $10 walkman or Griffin/Belkin could make a $30 adapter.
post #9 of 13
Well in the UK we do actually have some quality radio stations that aren't plastered with adverts i.e. the BBC. This is why I would like to see an FM radio in the iPod.

It's a shame that Griffin never released the iFm as this would have suited me perfectly (as long as they made a minified version).
post #10 of 13
I purchased my first mp3 player because it had a FM tuner. I go to UT football games and like to catch the play by play on the radio. However, I like to listen to my tunes during timeouts, halftime, on the way back to the car, etc. I would love a built in tuner in my ipod.

I ended up just buying the ipod because 128 meg sucks!! Plus, I was getting to not like my Sony player.

Eric
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Hard-Core.
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post #11 of 13
Interesting fact but the Sony Store near me is actually selling and advertising iPods.
"When I was a kid, my favourite relative was Uncle Caveman. After school, wed all go play in his cave, and every once and awhile, hed eat one of us. It wasnt until later that I discovered Uncle...
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"When I was a kid, my favourite relative was Uncle Caveman. After school, wed all go play in his cave, and every once and awhile, hed eat one of us. It wasnt until later that I discovered Uncle...
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post #12 of 13
Quote:
Originally posted by scotty321
3. You can only listen to these TV shows by tuning into certain FM stations on your dial... each television requires you to turn into a different FM radio station (usually low numbers on the dial, like 88.1, 88.3, etc.)

In fact, this is fairly common at most gyms. Every gym I've seen has this.

Not that I disagree that the iPod should have a tuner, if it can be included without a size increase, but every gym I've been to has just had a plug for headphones and their own controls.
"When I was a kid, my favourite relative was Uncle Caveman. After school, wed all go play in his cave, and every once and awhile, hed eat one of us. It wasnt until later that I discovered Uncle...
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"When I was a kid, my favourite relative was Uncle Caveman. After school, wed all go play in his cave, and every once and awhile, hed eat one of us. It wasnt until later that I discovered Uncle...
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post #13 of 13
I am a racing cyclist and often listen to the "intellectual" talk channel of the danish broadcasting corporation while on the road. Since I got my (now stolen) iPod I have tried to find ways to combine my need to listen to music and to get the radio. I have tried to record certain programs from the internet feed and then put it on my iPod for later listening, I started to subscribe to audible and just listening to interesting books instead. But it often ends with me bringing both the radio and the iPod.

Even if I often use the record function of the iPod when doing interviews I would rather have a radio in it and then use an old skool analog tape recorder for interviews.

iPod customer who crave an radio/iPod combo +1
"I reject your reality and substitute it with my own" - President Bush
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"I reject your reality and substitute it with my own" - President Bush
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