TMO Reports - Analyst Sees 'Good, But Not Great' Initial Sales of iPod nano

by , 1:00 PM EDT, September 13th, 2005

Initial sales of the iPod nano are "good, but not great," according to American Technology Research analyst Shaw Wu. In his latest Apple research report, obtained by The Mac Observer, he covered iPod sales trends discovered during recent checks with industry and channel sources.

Mr. Wu noted that Apple's latest MP3 player "is so far readily available at Apple stores, its online store, and [is] starting to show up at retail, including" He said that many Apple stores have so far sold 200 to 500 of the 1,800 to 2,500 nanos they received; in contrast, the iPod mini "was sold out for nearly six months following its launch." He also reported that black nanos are outselling the white ones by 5 to 1 on average, and as high as 8 to 1 in some locations.

The analyst continued to say that "Apple may need to make some changes to ensure [the iPod nano's] success as a high-volume product." Observing that the iPod mini continues to be a strong seller, Mr. Wu wrote: "We believe the iPod nano may cause sticker shock as consumers are not getting more storage for their dollar, as they are accustomed to [...] Apple may need to either increase the storage capacity to match at least the iPod mini or keep its storage capacities and cut the price by $50. We believe the former is more likely."

Mr. Wu continues to maintain a "Hold" rating on Apple's stock, with a $42 price target. He wrote: "Our concerns with its high valuation, INTC processor transition, slowing growth and high investor expectations remain. We prefer the risk-reward in the mid-to-high $30s." At 1:00 PM EST on Tuesday, Apple shares were $50.93, down 0.91% for the day.