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Analysts: Apple Has Upped High-End iPod Mindshare Among Retailers

TMO Reports - Analysts: Apple Has Upped High-End iPod Mindshare Among Retailers

by , 12:20 PM EST, November 15th, 2005

Piper Jaffray analysts Gene Munster and Michael Olson on Tuesday issued a research report covering the results of their latest non-Apple retailer survey. They discussed MP3 players with sales representatives at 50 U.S. retail stores and found that Apple's mindshare for US$150 and higher iPods has risen since their June retailer survey.

The full-size iPod and the iPod nano were recommended by 68% of the sales reps, up five points from the June survey. "The most common reasons we hear from MP3 player sales reps on why they recommend iPods are: video capability, ease of use, and eco-system of accessories," the analysts wrote.

Creative was in second place at 18%, down one point since June. iRiver, Olympus and Phillips had 4% each, while Samsung had 2% and Rio and Archos had 0%. iRiver declined significantly from June, when it was recommended by 11% of the sales reps, while Olympus and Phillips both had 0% in the last survey. Samsung stayed the same and Rio and Archos both bottomed out from their single-digit showing five months ago.

Apple Drops on the Low End

However, mindshare for the iPod shuffle has dropped among sales reps, with 38% of them recommending it this time around, compared with 52% in June. Mr. Munster and Mr. Olson noted, though, that in June they split the survey into 5GB or higher and 5GB or less MP3 players, as opposed to $150 or more and $150 or less. That meant the June survey included the iPod mini along with the iPod shuffle.

Given the change in methodology, however, the analysts still felt that "the nano is stealing some mindshare from the shuffle within the iPod family." Despite the drop in recommendations, Apple still retained the number one position in that category, with Creative taking the number two spot at 26%, up significantly from the 12% it earned in June.

Samsung held third place with 12% of the sales reps' recommendations, up from 9% in June, while iRiver remained steady at 10% and SanDisk leaped from 3% to 10%, earning itself a tie for fourth. Sony was recommended by 4% of the respondents, up from 0% in June, and Phillips fell from 1% to 0% and Rio tumbled from 13% to 0%.

"We believe Creative's positive move is likely a result of Rio's significant decline in sales rep mindshare," Mr. Munster and Mr. Olson wrote.

The analysts said that sales reps who recommend non-iPod MP3 players "consistently point to 2 features that lead them to steer customers to a non-iPod device: FM tuner and screen (vs. iPod shuffle with no screen)."

The survey results led the analysts to maintain their "Outperform" rating on Apple's stock, with a $68 price target. At 12:15 PM EST on Tuesday, AAPL shares were selling for $62.72, up 2.07% for the day.


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