Wednesday, September 21, 2005

Meet the Lone Bear on Apple's iPod nano

Peter Burrows blogs at BusinessWeek about analyst Shaw Wu at American Technology Research, who is getting the stink eye from a bunch of Apple-loving investors due to his comments last week regarding the Apple iPod Nano. As Wu puts it, "What’s really funny is that everyone interpreted my comments as negative. All I said is that sales of the nano were good, but not great. And I’m getting lynched for it!"

Wu is still sticking with his original statement that customers want 4GB over 2GB and prefer black over white. Expectations are high with some analysts predicting Apple will "sell as many as 11 million iPods in the December quarter." Wu believes Apple would have to sell at least 8 million nanos, double last holiday season's totals, to hit that number.

He reiterates that Apple will either have to increase capacity to 6GB or drop pricing. "At $249 for only 4 gigs, I just don’t see [them hitting that target.]. But I’m used to being contrarian. I know I’m standing pretty much alone on this," Wu said.

Given the fact that some semiconductor analysts believe Apple might be losing money on the nano due to high BOM costs of the flash memory, a price cut might be out of the question for the time being. Lower prices would spur more sales than increasing capacity to 6GB, but then again it's not my money...