| | Holiday Channel Checks...(TP 82)
With less than a week to go before Christmas, we
surveyed 32 of Apple’s US retail stores in its biggest cities regarding
iPod nano and video availability. It is clear that iPod is again one of
this season’s hottest holiday products with the general being that 4
GB nanos are constrained, while supply of iPod videos appears
adequate to meet demand.
• Survey Results. Specifically, 53% of stores were sold out of 4 GB
black nanos, while 59% were sold out of white 4 GB nanos. For the 2
GB models, 31% of stores were sold out of black, while 25% were
sold out of white. Meanwhile, video iPod was available in all 32
stores, although this may be misleading since we do not detect a
bottleneck in production as is the case with nano. Of the 24 stores
that were identified as being sold out of at least one version of the
iPod, only four were confident they would receive another shipment
before Christmas.
• Don’t Look to the Net. Wait times for Apple’s 4 GB iPod nano (both
white and black) on Apple.com have lengthened to 2 weeks from
“ships within 24 hours” at the beginning of December. 2 GB nanos
and videos are shipping within 1-2 days.
• Shuffling Off Stage? Apple has sold out of 1 GB iPod shuffles and
does not expect availability until mid-January. We believe Apple will
be making changes to its iPod shuffle at MacWorld San Francisco on
January 9th, potentially adding a small screen and/or new colors.
While the shuffle does not garner the attention of the nano or video, it
still addresses a large segment of the market, the sub-$100 price
point, which is particularly popular in emerging geographies.
• Inside the Numbers. We continue to believe Apple will sell just over
11 million iPods (+140% y/y) this quarter. We are expecting 7 million
nanos, 3 million videos and 1 million shuffles. We would note that the
tightness Apple is experiencing in the nano is likely due to shortages
of 4 GB NAND chips from Samsung. This tightness should help to
offset some seasonality in C1Q, but will also drive more holiday
purchases of 2 GB nanos, which we estimate to carry a gross margin
of 34-37% compared to the 20-24% margin on 4 GB. |
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