“With the holiday shopping season at hand, two truths are swiftly emerging about Apple’s iPod digital-music player. First, the product is going to be a gigantic hit. Second, there are going to be shortages,” Peter Burrows reports for BusinessWeek. “The only question is how big the shortfall will be. Some retailers contacted by BusinessWeek Online say they’re getting far fewer iPods than they requested — in two cases, fewer than half of their weekly orders. Also, retailing giant Circuit City expects demand to outstrip supply through the end of the year, though a spokesman wouldn’t say to what degree.”
Burrows reports, “And Apple Computer’s announcement that it would invest $1.2 billion to lock up supply of flash-memory chips from suppliers — including a new, three-year joint venture between Intel and Micron Technology — has some analysts worried about its ability to make enough iPods to satisfy runaway demand in the near term before additional capacity comes online. Indeed, Toshiba Chief Executive Atsutoshi Nishida says that ‘unfortunately, we’re not able to satisfy 100% of Apple’s requirements’ for flash chips.”
“‘If you want to get an iPod for someone this Christmas, I’d advise you to get it now — if you can find one,’ says Scott Anderson, merchandising manager for online retailer Crutchfield,” Burrows reports. “That’s certainly doable at this stage. Many of Apple’s own retail stores are well-stocked, and sales of flash-based iPods — which includes the nano and the lower-end iPod shuffle — have increased at other retailers in recent weeks, says NPD Group analyst Stephen Baker. The trouble is, however, that the real buying blitz hasn’t yet begun. “As of right now, they’re doing a great job of meeting demand, but we’re not going to really know how they did until Dec. 25,” says Piper Jaffrey analyst Gene Munster. “Analysts and retailers are wondering how much revenue Apple will end up leaving on the table. Even Apple doesn’t seem to know.”
Full article here.
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Note that despite the staggering success of Apple’s iPod over the past few years, Apple still has only sold about 30 million units. For reference, Sony sold over 300 million Walkman cassette players during the 1980s and 90s. “Apple iPods are being adopted faster than Sony Walkmans were back in the early 1980s,” according to a 2004 Merrill Lynch research note to clients.
Related articles:
Apple announces over 30 million iPods sold, reaches long-term supply agreements for flash memory – November 21, 2005
Apple iPod demand outpacing supply? – November 01, 2005
Report: Extremely strong demand seen for Apple iPod, iPod nano, iPod shuffle units – October 31, 2005
Piper Jaffray: Apple seeing high demand for iPod nano – September 14, 2005
Bring on the iPod scalpers!
i wished they locked up that ram earlier… hope it doesnt affect my stock potential too much…
maybe 14million this quarter may not be as hard to imagine as i wouldv thought
When will this hype end? I don’t see it the shortage. According to previous articles, how could there have been enough market share left for so many more iPod buyers?
MW: next, as in next you’ll want me to believe that there is a white plastic shortage.
I thought the iPod was supposed to fade into the obscurity that befalls all fads.
Oh well, maybe next year…
…or the year after that…
…or the year after that…
…or the year after that…
…or the year after that…
…or the year after that…
…or never.
That’ll piss the PlaysforSure off.
For sure.
forgot to put “fads” in quotes.
All this commotion over a stupid toy!
Yeah, a stupid toy that is based on a closed, proprietary format that gives Apple control over people’s content. It’s an outrage!
Go buy an XBOX 360 instead.
Also … think of how many people that have more than one iPod or are replacing older models … with 30 million sold … that is quite a bit of repeat business over time.
So just what DID happen to all those many, many iPod killers they kept telling us about?
..consigned to the bin of bad design I guess. Roll on the same for desktops and laptops too…
Yeah, go buy an Xbox and hang it around your neck.
“…going to be a gigantic hit.”
going to be? Way to be current! ROFLMHO
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That’s a great problem to have. Think about all the other mp3 player manufacturers with factories filled with unsold players …
I figure Apple will indeed leave money on the table, but what the heck, its just money.
My big brother Steve told me that by December 15th the only places left to buy iPods will be the Apple stores (increase foot traffic and boost “halo” sales) and at Apple.com. Shortage? Ha!
Gee…I should have bought apple when it was at $10 a share.
I bought AAPL at $13. Thank you Jesus!
Anyone who looked closely at the intro of the new iPods knew they would be in short supply during the Christmas buying season. Finding one the fortnight before Christmas will be a miracle.
Funny thing is that they’ll end up selling 3-4 times more iPods than M$ will Xbox 360s this holiday.
I was wery, wery fortunate to have bought the AAPL stock at the amazingly low price of 12 U.S. dollars. Which is about 716 rupees.
Now I am “swimming in de shit” as the young Americans say.
Praise Allah!
The iPod “fad” is obviously coming to a close. Apple is doomed!
The new “MacTel” boxes are going to be way overpriced and sloooow. Apple is doomed!
When SJ retires, there is no one that can replace him. Apple is doomed!
Apple’s computer market share will continue to be tiny (BG). Apple is doomed!
Did I forget anything?
Rock on Steve!
Big 1
Now give up your worldly possessions and devote your life to my teachings.
MW = waiting. It really requires no explanation.
I am brand agnostic, Harrah Abas Salaam, so my advice to Big 1 applies equally to you.
MW=certain. Rember, certain values are more important than others.
Whoops. What does an omniscient being do when they make a typo?
What does an omniscient being do when they make a typo?
Maybe this will help explain –
Q. How does Bill Gates change a light bulb?
A. He doesn’t. He declares darkness the new standard.
Am I the only one who thinks the XBox 360 looks like a paper shredder?