Tuesday, November 15, 2005

Analysts predict strong holiday iPod sales

Playlist writes about the challenges Apple is facing this upcoming holiday season and whether the iPod can maitain its dominance as the "it" gadget for a third season running.

Ross Rubin at NPD Group said, "It will be another strong holiday season for the iPod. Apple has its best lineup yet and several strong competitors, notably HP and Rio, have dropped out from a year ago. We’ll continue to see accelerating growth this holiday season compared with last year as there’s still a lot of greenfield in this market. The iPod with video may also entice owners of earlier hard drive-based models to upgrade as well."

Michael Gartenberg at JupiterResearch added, "The market doesn’t seem to be anywhere close to a saturation point. We’re getting to a penetration that’s reaching the mass market but Apple has done a good job reinvigorating the product line—particularly with the iPod nano and video iPod, a lot of those devices are going to the install base.”

Gartenberg mentioned that "There’s definitely some overlap in the different segments and Apple is always trying to tempt you to be sold up to the next highest price point,. For example, the 1GB shuffle, for a little more money, Apple says ‘we can get you into a low-end nano.’ Essentially you’ve got the shuffle being focused on the thriftiest ends of the scale, they want the iPod and they want the cachet. And an iPod is whatever Apple says it is."

Rubin agreed and commented that "The targeting of different demographics was more explicit with the mini where the color schemes skewed to younger buyers and women. The nano will still appeal to the more style-conscious, while the full-sized iPod buyers will be more driven by features and price-performance. That leads to a de facto segmentation between women and men. The shuffle, of course, remains aimed at that value buyer."

Gartenberg predicted that nano would be the big hit this holiday season. He said, "The nano comes in really at the sweet spot. Most consumers have 1000 or less in their collection . And the form factor is unmatched in the marketplace. There is no reason to think that the nano is going to sell as well if not better [than the mini].”

On the topic of class action lawsuits regarding the easily scratched nano, Rubin said, "Awareness of the lawsuit or the issues around it won’t deter many buyers and strong brands and products have thrived through far worse legal travails than the iPod faces."

Gartenberg added, "One thing about this country is that anyone can sue anyone else for just about anything. I think we’ll see zero effect. It’s hard to imagine these lawsuits having an impact on anyone other than lawyers."

It should also help that Apple is starting to bundle a case with the nano for added protection...