Report: Not Enough 4GB iPod nanos; Mixed Mac Retail Results

Apple Computer Doesnit have enough 4GB iPod nano units to meet demand, according to a research report issued by Off The Record Research (ORR), a brokerage and research firm. ORR also found that iBooks and iMac G5s are selling well, that high-end iMac G5 sales were eating into Power Mac sales, and that some pro buyers are leery of the impending move to Intel processors.

The report is based on interviews with retail buyers (as in purchasers for retail outlets, not consumers), Apple specialty resellers, department supervisors and associates, and in-the-field visits to Apple Stores.


The picture of the iPod market painted by ORRis report is a complex one, with the firm saying that the iPod nano is selling well, but that Apple has so far not shipped enough 4GB nano units to meet demand. With the 4GB unit at US$249, just $50 more than a 2GB unit, consumers want the extra capacity.

This is especially true in light of the fact that the iPod nano is replacing the larger capacity, hard drive-based iPod mini.

ORR reported that by and large, the release of iPod nano on September 7th has invigorated the MP3 market for both Apple and its competitors. On the other hand, retail buyers are saying that Apple has missed the boat in terms of its product mix in the retail channel.

"People want the black 4GB and we donit have it. Itis only $50 more for another 2GB, and they want that," an anonymous source at Circuit City told the firm.

ORR also found that most buyers and resellers think that the flash memory nano is competing more with hard drive digital media devices.

"Although the nano is a flash device," read the report, "it is difficult to say it is taking market share in the flash category because it does not go head-to-head with other flash players, nor is it likely to cross over to the price-conscious flash customer."

Along those same lines, the report said that a price drop on Appleis iPod shuffle product line is expected to drop in the first week of October. Apple has heretofore not announced such a price drop.

Lastly, the firm found that sales of the 20GB iPod were slowing, that remaining inventories of the iPod mini were still selling briskly with those resellers who have them in stock ("One source said some buyers were hunting for minis, as it now is viewed as a collector’s item," the report said), and that some specialty Apple resellers expect the nano to boost the iPodis popularity even further.


On the positive side, iBook sales are trending higher, helped in part by improving supply. The report did say that one reseller surveyed found improving iBook sales were not quite enough to offset declining PowerBook sales.

The iMac G5 is also doing very well, and specialty resellers are reporting strong sales quarter over quarter. Sales are strong enough, in fact, to offset softening sales of the Power Mac G5.

Indeed, some resellers have seen some Power Mac sales going to the consumer-based iMac G5. In addition, the firm said, "Two buyers reported a decrease in pro market or business purchases, which they attributed to customers waiting for the Intel-chip line to arrive in 2006."

ORR specifically noted that this is the first time such concerns have been reported as affecting sales in ORRis research.

Other Points

  • Tiger sales are meeting expectations.
  • Mighty Mouse sales have been lower than expected, with some customers finding the device not as easy to use as expected.
  • The holiday shopping season should be a strong one for Apple.

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