Apple's unexpected iPod shortage spreading
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.
"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.
Comments
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.
those ipod touches are flying like hotcakes...
not everyone wants to pay $1800-$2000 for 2-years of iphone
and have ATT
5 Weeks?? That could be significant lost sales. I don't want an IOU on the 25th.
Thats a very long time
__________
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.
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).
...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'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.
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.
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.
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!
I'm surprised they did not foresee the demand.
Maybe they've got something new for January and want inventory flushed??
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.
I just wish the stock would go back up!
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.
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?