Piper Jaffray: Positive Outlook for iPod Sales

February 25th, 2008 at 2:00 PM - News by John Martellaro

Piper Jaffrayis Gene Munster said on Monday that while itis too early to make a definitive call on Appleis March Quarter iPod sales, a close look at the NPD sales numbers from January, projections and the iPod Shuffle price decrease on February 19 suggest that Apple will meet year over year sales numbers.

In a research note obtained by iPO, Mr. Munster made these key points:

• While it is way too early to make a definitive call on March qtr iPod units, we have analyzed the first month of NPD data (Jan.) for the quarter and found that it suggests iPod units of 9.5m-10.3m.
• Street consensus for March qtr iPods is 10.8m, representing a 2% y/y increase; the mid point of the 9.5m-10.3m range suggests a 6% y/y decline.
• We see this data point as a slight positive, given recent Street chatter of a very weak iPod number for the qtr, and we note that the monthly contribution we have factored in for Feb. & March may prove too conservative given the iPod shuffle price cut on 2/19, leading to a more back-end-loaded qtr for iPod units.

Mr. Munster pointed to the price cut for the iPod shuffle as a key factor and will drive sales to a greater extent than previous cuts in the past. Historical data on sales by month in previous years was factored in to the calculations.

Finally, Mr. Munster noted that AAPL remains on the Piper Jaffray Alpha list, "and we recommend our Buy Rating," he wrote.