Holiday Glow Shines on Apple
While Apple's own stores appear to have ample supplies of iPods, third-party retailers such as Circuit City (CC), Best Buy (BBY), CompUSA, Target (TGT) and Amazon.com (AMZN) appear to be running low, the analysts reported, with individual stores either sold out of particular iPod models or -- in the case of online stores -- reporting long wait times before the devices will be shipped.
But the low availability doesn't appear to be discouraging shoppers. On Amazon, for instance, various iPod models dominated the company's lists of best-selling products in the digital music player and overall electronics categories, analysts noted.
Noting this demand, Whitmore raised his estimate on the number of iPods that Apple will sell this quarter from 9.5 million to 11 million. In particular, he predicted that the company would sell more of its high-end video iPods than previously expected; that should help boost the company's bottom line. Including stock options costs, Whitmore now expects Apple to earn 54 cents a share in its first quarter, up from a previous estimate of 49 cents a share.
Other analysts were bullish on Apple's iPod sales but were more concerned about whether the company might leave sales on the table this quarter. J.P. Morgan's Bill Shope, for instance, predicted that Apple would sell more than the 10.8 million iPods that he previously forecast this holiday season. But he noted that Apple's retail partners were sold out of iPods on the Friday after Thanksgiving."We expect Apple to continue to aggressively replenish channel inventories throughout December, but demand is likely to continue to exceed supply," said Shope, whose firm has provided non-investment-banking business for Apple in the last year. And some analysts were even more concerned. Piper Jaffray's Gene Munster, for instance, argued that the Street might be getting ahead of itself on iPod sales. Instead of being a bullish sign, the fact that iPods are sold out at places such as Best Buy is an indicator that Apple is not going to be able to meet demand, he said. Unlike his peers, Munster decided to stand pat with his forecast of 9 million iPods shipped, though he added that Apple might narrowly exceed that number.
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