Sales of Apple Computeris iPod shuffle are "weaker than expected" and the price manufacturers pay for NAND flash memory may start falling by as much as 40% as a result, DigiTimes.com reported Tuesday.
Sources tell the online Asian technology site that Samsung, the manufactuers of the flash memory chips used in the shuffle, are sitting on a glut of the chips it had alloted for Apple. Not wanting to keep the inventory, Peter Shu, chairman of Transcend Information, said he expected NAND flash prices "may drop up to 40% in the future."
"Although the iPod Shuffle was a hit when it was first introduced on the market, sales of the MP3 player are not justifying the supply forecasts for NAND flash that Apple has secured from Samsung," sources said. If Apple cancels the orders, Samsung may release even more NAND flash into a market already being affected by the influx of a number of new NAND flash producers, Mr. Shu said.
There have been numerous reports over the past few weeks saying sales of the iPod mini and iPod shuffle have slowed dramitcally and that Apple is sitting on thousands of unsold models. Some Wall Street analysts have reported similar stories. Apple has refused to confirm the reports. Making matters worse, Apple is now deliberately combining quarterly sales figures of the four iPod digital media devices, no longer breaking down results, as of last quarter. As a result, analysts and investors can no longer gauge whether a particular product is successful or not.