iPod touch supplies seeing shortages, changes due by September
Stocks of some iPod touch models are starting to run low and may be connected to recent promotional announcements, according to one Wall Street analyst, who also notes that the advent of the $199 iPhone 3G will put pressure on Apple to alter its pricing on the high-end media players in the next few months.
In a report to clients Tuesday, Lehman Brothers analyst Ben Reitzes observes that the 8GB iPod touch is now showing a small but significant delay of 1-2 business days for orders made from Apple's online store, while chain retailer Best Buy has seen reduced supplies of 16GB models at its own locations.
Slight shortages of the 8GB device are likely due to the recent launch of Apple's back-to-school promo, the analyst suggests. The sudden spike in orders for the device, which is given away for free to students when bought with a new Mac, may be surging ahead of supply.
Without the benefit of educational sales, though, Best Buy's stock changes are more difficult to explain. Reitzes offers no immediate prediction but notes that Apple is under pressure to take action on the iPod to realign its prices in the wake of the iPhone 3G.
"We believe Apple will need to reposition the iPod touch product by September now that the iPhone acquisition price is lower," he says in the report. "We expect the iPod touch to experience significant cannibalization from lower-priced iPhones."
No matter its origin, the supply pinch is said to be further evidence that Apple's wider iPod sales are faring better than expected. Current data points to iPod sales climbing by two percent year over year through early June where they were estimated to have dropped by the same amount, according to Reitzes.
This may turn Lehman's estimates of 9.5 million iPods sold in the spring quarter into a "conservative" estimate, he adds.
Even so, that growth may be behind the curve: the overall market grew 12 percent in the same period and was led by gains from Microsoft's Zune as well as unusual improvements by Coby and Philips players.
In a report to clients Tuesday, Lehman Brothers analyst Ben Reitzes observes that the 8GB iPod touch is now showing a small but significant delay of 1-2 business days for orders made from Apple's online store, while chain retailer Best Buy has seen reduced supplies of 16GB models at its own locations.
Slight shortages of the 8GB device are likely due to the recent launch of Apple's back-to-school promo, the analyst suggests. The sudden spike in orders for the device, which is given away for free to students when bought with a new Mac, may be surging ahead of supply.
Without the benefit of educational sales, though, Best Buy's stock changes are more difficult to explain. Reitzes offers no immediate prediction but notes that Apple is under pressure to take action on the iPod to realign its prices in the wake of the iPhone 3G.
"We believe Apple will need to reposition the iPod touch product by September now that the iPhone acquisition price is lower," he says in the report. "We expect the iPod touch to experience significant cannibalization from lower-priced iPhones."
No matter its origin, the supply pinch is said to be further evidence that Apple's wider iPod sales are faring better than expected. Current data points to iPod sales climbing by two percent year over year through early June where they were estimated to have dropped by the same amount, according to Reitzes.
This may turn Lehman's estimates of 9.5 million iPods sold in the spring quarter into a "conservative" estimate, he adds.
Even so, that growth may be behind the curve: the overall market grew 12 percent in the same period and was led by gains from Microsoft's Zune as well as unusual improvements by Coby and Philips players.
Comments
As far as the iPod Touch is concerned, I believe they will either upgrade it significantly or phase out the 8GB model as they did with the 4GB iPhone. With all the new technology showing up everyday, you cane be sure Apple will do something innovative with it.
By the way, I own a 32GB iPod touch and think it would easy to install this chip set into an iPhone.
-Clive
I like the thoughts also expressed that there is another 3G iPhone lurking, which has video conferencing like regular cheap 3G phones.... though I'm not at all confident that's true.
I'm expecting the earlier rumors of a slightly larger phone to be true - though a larger phone will be harder to hold as a phone. So perhaps that's how the iPod Touch will grow, into an internet tablet.
ps. I suppose the other possibility is that a bigger iPhone will rely on a headset (or handsfree) for talking and include a video camera so we can video chat.
"We believe Apple will need to reposition the iPod touch product by September now that the iPhone acquisition price is lower," he says in the report. "We expect the iPod touch to experience significant cannibalization from lower-priced iPhones."
I'd be willing to bet that Apple would be pleased by such cannibalisation. However, the markets for the iPhone and the Touch simply don't overlap significantly. People are smart enough to recognise that the on-going costs of the iPhone are far more significant than the initial purchase price.
Come July 11th or sooner will see what the cost of the data plans (in Canada) are for the new phone. Wondering if you will be able to go in an buy the phone and say no thanks to the contract as you just want it as an iTouch.
Just a guess, but no.
I've been waiting for a price drop on the iPod Touch for a while. I'd like the 32Gb version so I can use it as a complete home jukebox hooked up to my stereo, but $499 was just too steep.
I've been waiting for a price drop on the iPod Touch for a while. I'd like the 32Gb version so I can use it as a complete home jukebox hooked up to my stereo, but $499 was just too steep.
For $100 you can do that with the computer you already have: wirelessly over Airport Express.
Perhaps around September we'll see a 64GB iPod touch followed by a 32GB iPhone.
That is 1.5 to 2.5 months after the relese of the 3G iPhone, and that is only for 22 of the 75+ countries that will have the iPhone this year. IF they follow last year's pattern, a capacity upgrade will come at around 6 months, right after the holiday quarter and new HW componets, (better camera, fron-facing camera, better resolution display, OLED, etc.) would come in the summer. IMO, this upgrade pattern seems to make to me to maximize sales.
This is precisely why i'm not hopping on the 3G iphone bandwagon in July. I have an 8gig iphone and the only draw back in my mind is the limited capacity. I don't think 16gigs is quite enough either, and I'm fairly certain they'll bump the capacities along side of iPod refreshes in September just as they did last year.
It's funny that prior to the iPhone, 1/8th to 1/16th of one GB was the most common amount Flash built into a phone. 4 or 8GB was a lot to put into a phone and now 16GB isn't enough. Amazing how quickly our clture resets the bar for electronics.
Logically iPhone pricing shouldn't affect iPod touch pricing unless AT&T is also paying a $200 subsidy on the iPod touch. The iPhone is actually much more expensive over the life of the contract.
While that is true, so many people don't look at the total cost of ownership when making a purchase. I'll be saving money over the next year with the 3G iPhone, despite the $10/data increase, but I wish Apple did not have to do a typical subsidy model. It seems to limit a manufacturer's desire to update their firmware, though the App Store revenue should give Apple good reason to do so. But companies like Moto have no financial motivation to do so.
Isn't is a little early for iTouch shortages? We're pretty confident Apple will update in September as always...
It depends on how much they thought that the new iPhone was going to eat away at a lot of the reasons people opted for the iTouch.
Perhaps around September we'll see a 64GB iPod touch followed by a 32GB iPhone.
32GB iPhone is plausible, but 64GB iTouch may be a bit much to expect at a reasonable price.
32GB iPhone is plausible, but 64GB iTouch may be a bit much to expect at a reasonable price.
I think the wholesale price for 64GB is still several hundred dollars. A few months will help, but we may still have to wait until 2009 to see this capacity. Then getting to 128GB would probably evn be a greater wait.
PS: Could Apple use a special SSD controller chip that could balance data storage and retrieval across multiple lower quantity SSDs? For instance, offer 48GB model come the fall with 3x16GB SSD (potentially at a lower pricepoint than one 32GB SSD) that would be transparent to the user?
Isn't is a little early for iTouch shortages? We're pretty confident Apple will update in September as always...
Yeah, I continue to believe that there is something about the portable roadmap at Apple that we haven't seen. This article (after mentioning the shortages), only states the obvious. It's pretty much certain that Apple would refresh if not totally update the iPod touch by September, if not sooner. The recent promotion is obviously to clear out old stock.
The real questions are things like:
- why are they *already* running out of touch's if the update is not for months and months?
- why is Apple going for two full months without stock of (or sales of) iPhone's?
The second one is driving me crazy as it just makes no sense at all. It's like throwing away 10% or your yearly sales for no reason other than the supply chain? And Apple was just voted to have the best supply chain in the world bar none by a very prestigious group that follows such things.
Either Apple is screwing up on the supply front big-time, (hard to believe), or something else is happening behind the scenes that we don't know about. I am guessing the second one.
Come July 11th or sooner will see what the cost of the data plans (in Canada) are for the new phone. Wondering if you will be able to go in an buy the phone and say no thanks to the contract as you just want it as an iTouch.
Why would you want to buy the iPhone if you're going to use it as an iTouch? The only reason the iPhone is $200 is because of the contract subsidy. If they did let you buy it without a contract, you would end up paying $400.
Yeah, I continue to believe that there is something about the portable roadmap at Apple that we haven't seen.
I think tey will be cutting out the iPod firmware in favour of OS X for the iPod. This would allow additional revenue not only to come from the iTunes media sales, but also from program being purchased. If it has a Safari it helps push WebKit as a browser that should be supported.ANd may simplify their OS development, tough I see some issues with OS X on a smaller processor with a smaller screen that may or may not have a touchscreen.
I have no doubt that the back to school promotion would affect iPod Touch supplies - but Apple has to also be trying to work out where the iPod Touch goes next. The PERCEPTION that the iPod Touch is more expensive than the iPhone (even though it isn't really) will cannibalise touch sales.
I like the thoughts also expressed that there is another 3G iPhone lurking, which has video conferencing like regular cheap 3G phones.... though I'm not at all confident that's true.
I'm expecting the earlier rumors of a slightly larger phone to be true - though a larger phone will be harder to hold as a phone. So perhaps that's how the iPod Touch will grow, into an internet tablet.
ps. I suppose the other possibility is that a bigger iPhone will rely on a headset (or handsfree) for talking and include a video camera so we can video chat.
Unless you don't have any cell phone (rare these days), the iTouch really is more expensive. You'll be paying your cellphone provider whether you have an iPhone or some other phone, but if you get an iPhone they knock $200 of the price. That makes the iPhone cheaper than the iTouch, which isn't subsidized and would have to be purchased along with paying for whatever cellphone you already have.
Come July 11th or sooner will see what the cost of the data plans (in Canada) are for the new phone. Wondering if you will be able to go in an buy the phone and say no thanks to the contract as you just want it as an iTouch.
Nope. I've already read a couple articles stating that Rogers is saying the iPhone won't be available to buy without signing a contract.
My real fear is Apple will for some reason transition the iPod Touch so that iPhone totally overtakes it, and we'll see no more iPod Touches.
Personally, I think the Touch is pretty well perfect. My intention is to buy the 2.0 software upgrade, sign up for MobileMe and away I go. I like my flip phone, and it serves me well on a month-by-month. If I can get my e-mail and all the rest on the run over misc WiFi hotspots whenever my Touch detects one, then I'm pretty damned happy, and all I'm paying at that point is 100 bucks a year for all my data and about 150 a year for my cellular. Score!