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To: Johnny Canuck who wrote (45187)	12/4/2008 11:54:12 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71951

Apple Watch Recession Could Wipe Out The iPod Brian Caulfield, 12.04.08, 10:51 PM EST An analyst expects the downturn to lead consumers to drop the music player, even as sales of iPhones soar. Note to Apple Chief Steve Jobs: Don't worry. Piper Jaffray analyst Gene Munster still loves you. As for your little friend the iPod, well, let's just say Munster doesn't think it's so cute any more. A longtime Apple (nasdaq: AAPL - news - people ) fan, Munster slashed his estimate for the company's 2009 sales by 5% late Thursday, citing weak consumer spending and economic uncertainty. Mac and iPhone fans have nothing to panic about, however: Munster thinks Apple's computers will continue to gobble up market share, and sales of the iPhone will boom. Article Controls imageemail imageprint imagereprint imagenewsletter imagecomments imageshare imagedel.icio.us imageDigg It! imageyahoo imageFacebook imagerss Yahoo! Buzz Then again, Munster might be Apple's biggest cheerleader. Hey, the man has a price target on Apple's stock of $235. This on a company whose shares were selling for $91.41 at the end of Thursday trading. So pay attention when Munster says the iPod faces a bleak future. Rising unemployment and credit problems will just make it tougher for shoppers to justify spending money on little luxuries next year. Munster predicts Apple will sell 20% fewer iPods next year, after clocking unit sales growth of 6% this year. "We are modeling for the sky to fall on iPod demand," Munster wrote. Those same factors caused Munster to cut his target for Mac sales, too. While PC sales will cool, however, Munster still predicts Apple will gobble up market share next year. As a result, Munster figures Mac sales will jump 10% over this year's levels in 2009. The iPhone, however, could be the new iPod: a hit product that powers Apple through a downturn in stronger shape than ever. Munster stuck to his prediction that Apple will sell 45 million iPhones next year, despite bearish guidance in recent weeks from Research In Motion (nasdaq: RIMM - news - people ) and Palm (nasdaq: PALM - news - people ). Munster sees smart phone sales booming next year, and Apple romping through the fast-growing category. So does Musnster have it, right? Maybe--although the iPod Touch may have a future, in part because it can tap into iPhone applications, including Truphone, which turns the second-generation iPod Touch into an Internet phone. Comment On This Story So who wins if the iPod loses? Microsoft (nasdaq: MSFT - news - people ), sort of. As iPod sales decline, Apple may decide to put its emphasis on the iPhone, and Munster argues Apple will flesh out its burgeoning smart phone business with additional iPhone models next year. That could give Microsoft's Zune a chance, finally, just as Microsoft's PDAs finally hit their stride after the market for the faddish handhelds completely collapsed. Oh well.