Ever since the iPod debuted in 2001, it has seen a continuous rise in sales, generation after generation until the most recent iPod Shuffle. Now, it looks the sales level has finally levelled off, leaving Apple with a hefty iPod stock. As a result, this caused Apple's share price to fall 4.5% on Friday's trading session.
One investment firm Golden Sachs expects the shipments of iPods to be flat this quarter, with another reporting that that due to how widespread the iPod is, it is causing some models to decline in sales, especially the recent iPod Shuffle. The advantage with such an over-stock of iPods is that consumers who have been on the look out for an iPod should have no problem obtaining one now. However, sales are likely to rise again later on during the next school year starting again in September as well as the Christmas season.
Finally, one other issue that may have affected sales is due to the class-action lawsuit over poor battery life. This suit went on for quite a while until recently when Apple decided to settle with its customers, agreeing to offer $50 vouchers as well as extend their iPod warranty to two years for those who have had battery problems. These vouchers could be used towards their next battery purchase or against any other Apple goods apart from Gift vouchers and iTunes music downloads.
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Concerns that Apple may be sitting on hefty iPod inventories dragged the company's share price down 4.5 percent in Friday's trading session '” a bruising to which most Apple investors are not accustomed. Investment firm Goldman Sachs said in a report Thursday that it expects shipments of Apple's digital music player to be flat this quarter, while Internet news site AppleInsider also reported Thursday that Apple has a glut of most iPod models, especially the recently launched iPod Shuffle. Still, some analysts think the sell-off in Apple's stock may actually be an opportunity. Read the full article here. |
As the iPod sales are finally started levelling off (if not falling), I wonder if consumers are starting to purchase other players or if that it is just getting to the point where the majority of those who wanted a portable audio player already have one at this stage. In my opinion, the slow down in the iPod shuffle is likely due to iPod Shuffle owners finding out that despite the well-known iPod brand and compact size, it does not take long to find out that the lack of features may be enough for them to persuade their friends to go for something else. 😉
It is nice to see apple deciding to settle with its customers when it comes to the batteries giving up after a 1.5 to 2 years. Just a pity they have not got the hint to modify their iPod design to allow for a user-changeable battery, rather than risking their business with lawsuits like these and upsetting customers.
Source: MSNBC - Business
