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Apple shipping 100K nanos a day, mulls 1GB model

post #1 of 26
Thread Starter 
In a best effort to meet demand for its top-selling iPod nano this holiday, Apple Computer is building and shipping 100,000 of the ultra-slim digital music players each day, reliable sources tell AppleInsider.

It's unclear how long the Cupertino, Calif.-based iPod maker has been manufacturing the players at the current rate, which would amount to approximately 9 million units per quarter.

In recent weeks Apple has made moves to increase its output of iPod nanos, which are the company's best selling items this holiday season. This included tapping former click-wheel supplier Synaptics to help supply components for click-wheels in the 2GB and 4GB nano.

Despite early and widely publicized concerns over the iPod nano's protective coating, the players have proven to be a hit with consumers and are sold out in most stores. The popularity of the iPod nano design may have even surprised Apple, which is now mulling an expansion of the product line to the lower tier of the flash-player market.

According to sources, last week members of Apple's marketing team wrangled over the release of 1GB iPod nano -- essentially a 2GB nano sans half the flash memory -- which the company recently showed to its business partners and considered for release early next year.

Some members of the team reportedly argued that 1GB iPod nano would occupy the same value space as a redesigned iPod shuffle, which Apple is expected to introduce at the Macworld Expo in San Francisco during the second week of January.

For a 1GB iPod nano to be successful in the digital music player market, sources say Apple would need to price the player aggressively at the $149.99 price point, which poses the question of whether the iPod maker could sustain its profit margins on such a model.

"I think the pricing may be tough at $149, but Apple has proven that customers are willing to pay for style over storage capacity," said one Wall Street analyst who asked not to be identified.

"Apple's profitability should improve as the price of NAND flash has been falling and from what I understand, the recent $1.25 billion in deals with 5 [NAND flash] suppliers through 2010 are favorable for Apple," the analyst said. "$149 for a 1 GB nano sounds economically feasible and may in fact be very profitable."Â*

The analyst added that Apple currently makes a larger profit from sales of the $199 2 GB nano than it does the 4 GB nano.

Meanwhile, both sources and analysts believe Apple could market its second-generation 512MB iPod shuffle for as little as $79.99.
post #2 of 26
If prices of NAND are that low, and they are, then Apple could have a 1GB shuffle for $99. Why even bother with the 512MB model.

The charts on this page include DDR, SDRAM, and NAND which is at the bottom. you can see the spot prices for yourself.

Apple and other companies with contracts get better prices than these.

http://www.digitimes.com/news/a20051214PR202.html
post #3 of 26
That's a lot of nano, right there.
'L'enfer, c'est les autres' - JPS
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'L'enfer, c'est les autres' - JPS
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post #4 of 26
Excuse me sir, but I'm going to have to site you for grossly negligent and incorrect use of the phrase "Begging the Question." It does not, nor has it ever, implied that a statement leads logically to a question. It does refer to asking a question which leads one to a predetermined answer.

Thank you.
post #5 of 26
Quote:
Originally posted by ChevalierMalFet
Excuse me sir, but I'm going to have to site you for grossly negligent and incorrect use of the phrase "Begging the Question." It does not, nor has it ever, implied that a statement leads logically to a question. It does refer to asking a question which leads one to a predetermined answer.

Thank you.

Where was the statement "begging the question" used here?

I see the article uses

"which poses the question"
post #6 of 26
Quote:
Originally posted by melgross
Where was the statement "begging the question" used here?

I see the article uses

"which poses the question"

That's because he just changed it.
'L'enfer, c'est les autres' - JPS
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'L'enfer, c'est les autres' - JPS
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post #7 of 26
The lineup could be:

$99.00 for 512MB shuffle
$149.00 for 1GB nano
$199.00 for 2GB nano
$249.00 for 4GB nano
$299.00 for 30GB iPod
$399.00 for 60GB iPod
Living life in glorious 4G HD (with a 2GB data cap).
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Living life in glorious 4G HD (with a 2GB data cap).
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post #8 of 26
Quote:
Originally posted by CosmoNut
The lineup could be:

$99.00 for 512MB shuffle

I don't think so. Maybe $99 for a 1 GB shuffle. Or $79 for a 512 MB shuffle. I don't see both models staying, and I don't see the old model staying at the old price.

Quote:
$149.00 for 1GB nano
$199.00 for 2GB nano
$249.00 for 4GB nano
$299.00 for 30GB iPod
$399.00 for 60GB iPod

For a few months, yes.
post #9 of 26
Quote:
Originally posted by ChevalierMalFet
Excuse me sir, but I'm going to have to site you for grossly negligent and incorrect use of the phrase "Begging the Question."....

Thank you.

Every hear of "cite"? You know the verb for citation not "sitation." And gross negligence is a legalistic phrase that goes far beyond a simple misuse of a phrase. It pains me to see it misused like that.
post #10 of 26
Quote:
Originally posted by Bluecrusader
Every hear of "cite"? You know the verb for citation not "sitation." And gross negligence is a legalist phrase that goes far beyond a simple misuse of a phrase.

Also, since ChevalierMalFet was being so anal, let's also correct his "Excuse me sir," to "Excuse me, Sir,".
post #11 of 26
100000? Thats crazy stuff. Thats more than one per second.
"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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post #12 of 26
Hahah. My comment was meant to be good natured. While I appreciate being corrected when wrong, I don't appreciate when it's done in spite.
post #13 of 26
If Apple introduce a 1gb nano, won't that kill sales of the 1gb shuffle? Or vice versa? Although, having only one shuffle model at 512mb doesn't seem like a bad idea, IMO
post #14 of 26
Quote:
Originally posted by zedrac
If Apple introduce a 1gb nano, won't that kill sales of the 1gb shuffle? Or vice versa? Although, having only one shuffle model at 512mb doesn't seem like a bad idea, IMO

If the 1GB Shuffle was priced at $99 it wouldn't.
post #15 of 26
Apple likes "twos." Two shuffles, two nanos in two colors, two iPods in two colors. I don't see that changing any time soon, so that leads me to believe that the price lineup I listed before won't actually happen.

I think we'll see the two shuffles redesigned to be thinner and a little shorter with more solid construction ala nano. I really don't think we'll see a 1GB nano. It goes against the rule of twos.
Living life in glorious 4G HD (with a 2GB data cap).
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Living life in glorious 4G HD (with a 2GB data cap).
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post #16 of 26
Quote:
Originally posted by CosmoNut
Apple likes "twos." Two shuffles, two nanos in two colors, two iPods in two colors. I don't see that changing any time soon, so that leads me to believe that the price lineup I listed before won't actually happen.

I think we'll see the two shuffles redesigned to be thinner and a little shorter with more solid construction ala nano. I really don't think we'll see a 1GB nano. It goes against the rule of twos.

Interesting thought. You could be right.
post #17 of 26
100,000 nanos a day, thats a lot.

especially sinse i saw the sales guy in hmv today trying to dissuade someone from getting an ipod in favour of a creative player.

stu
post #18 of 26
Quote:
Originally posted by CosmoNut
Apple likes "twos." Two shuffles, two nanos in two colors, two iPods in two colors. I don't see that changing any time soon, so that leads me to believe that the price lineup I listed before won't actually happen.

I think we'll see the two shuffles redesigned to be thinner and a little shorter with more solid construction ala nano. I really don't think we'll see a 1GB nano. It goes against the rule of twos.

Hmm Apple does like twos but it also like's threes: Good, better, best. Or Shuffle, Nano, iPod.

Anyway that is one mega-nano mountain of iPods. They are selling almost as an alternative to jewellery (small, beautiful shiny). I have had to fill a few of them up (secretly as Christmas presents) for friends buying nanos for their lovers - when neither of them has ever used iTunes before. It means my iTunes library gets bigger!
post #19 of 26
I don't know, a 1 Gig nano doesn't make that much sense to me.

Too much overhead involved, the color screen, casing and the rest of the motherboard, all to drive a tinny 1 Gig flash drive.

The difference in price between the 1 and 2 gig flash ram module must be much less than $50 for Apple.

The shuffle was a great deal when it was introduced almost a year ago, but now it is overpriced, especially the 512MB model that never changed price, while competing players dropped in price. I know a lot of people that bought iPods recently, but I also know a good amount of people that decided to buy cheap $50 MP3 players with a screen, simply because it was cheap.

So the shuffle badly needs a price cut, and/or some neat new features, because Apple will gradually lose the lower-end of the MP3 player market.

I currently have a nano, and I sometime miss my shuffle, which I sold to pay for my nano. The greatest thing about the shuffle is the one thumb "blind" operation. I could walk with my shuffle in one hand, always ready to change tune or the volume.
post #20 of 26
Quote:
Originally posted by stustanley
100,000 nanos a day, thats a lot.

That does seem to be on the high side. For some reason, some analysts claim there will be more than 10 million iPods sold this quarter. Assuming the nano model makes a third of all iPod sales, more than about 36k nanos a day would need to be sold to hit that, I might expect to see some peaks at 100k, with sales much lower after the holidays.
post #21 of 26
Quote:
Originally posted by JeffDM
Assuming the nano model makes a third of all iPod sales

Which isn't a smart assumption, if you take the ASP into account.
post #22 of 26
Quote:
Originally posted by Chucker
Which isn't a smart assumption, if you take the ASP into account.

I think I missed something, because I don't know what you mean. Can you explain?
post #23 of 26
Quote:
Originally posted by JeffDM
I think I missed something, because I don't know what you mean. Can you explain?

ASP = average selling price, so I would guess that the poster was referencing looking at price vs. unit sales percentages. So the iPod Shuffle for example could simultaneously comprise 35% and 10% of iPod sales, assuming that it is a higher volume and lower cost product than, say, the iPod Nano (please note that those numbers are completely arbitrary).
post #24 of 26
Quote:
Originally posted by JeffDM
I think I missed something, because I don't know what you mean. Can you explain?

Apple doesn't disclose sales numbers per model, but they do disclose the average selling point of iPods.

Q2/05: 191
Q3/05: 179
Q4/05: 188

As you can see, it has been hovering around $180-200 for a while. A little bit of calculation reveals that this makes the higher-end iPod shuffle and the lower-end mini (at that time) the most-purchased items.

Therefore, your assumption that the nano only makes up for about a third of sales is very off. I think it's fair to assume, rather, that it makes up for 60-80%.
post #25 of 26
Does anyone have an idea of how many 2Gb and 4Gb are being produced out of the 100,000 daily?
post #26 of 26
As they said, 100,000 a day equals 9 million for the quarter. There have been sales estimates for that many Nano's.

The question is, how many of those Nano's are making it to the stores?, and when did the production get to that level? If they were making 50,000 a day, and raised production to that level a few weeks ago, then we can understand why there have been shortages. It's the last few weeks that the big surge in purchasing has begun.

So it's possible that there will "only" be 7 million produced for the quarter, rather than 9.

But, it's also being said that sales of the 5G's are equaling, and in some cases, even exceeding, the sales of the Nano lately. That would ease the pressure on Nano production, and raise the ASP this quarter.

I will be very interested to see what that is.
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