Analyst Sees 'Good, But Not Great' Initial Sales of Nano

According to American Technology Research analyst Shaw Wu, the Apple iPod nano is doing good but not great business reports E-Commerce News. Wu noted that the nano "is so far readily available at Apple stores, its online store, and [is] starting to show up at retail, including Amazon.com."

Many Apple stores "have so far sold 200 to 500 of the 1,800 to 2,500 nanos they received." This is in sharp contrast to the product it replaces, the iPod mini, which "was sold out for nearly six months following its launch." Wu also notes that "black nanos are outselling the white ones by 5 to 1 on average, and as high as 8 to 1 in some locations."

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 US$50. We believe the former is more likely.

Given Apple's bill of materials costs for using Flash memory instead of a mini hard drive, it might be difficult for Apple to try either option. If they up the capacity then the nano will cost in excess of $300 and if they cut pricing they will drastically reduce their margins. Also, I don't think any company would want to be sold out of a product for six months. Holding too much inventory isn't good either, but maybe they planned a little better this time around to have more product in stock at launch...