Sliding iPod Sales Brings On Apple Angst

iPods, even as a mature product, will continue to help spur non-Mac buyers to buy Macs, which have done considerably better than skeptics (present company, included) would expected.

While Apple (AAPL) stores only account for 17% of revenue, they're a high generator of sales per square foot for most any mall (just walk in one any time of day or night on any given day -- and, yes, I know not everybody is buying and more than a few are seeking repairs at the always-crowded Genius Bar!) -- and they have proven to be effective marketing tool for Apple products.

Where does that leave Apple's stock? Some people think it's fully valued at closer to $60; others think $200. Any disappointment by the iPhone, potentially the most volatile piece of the puzzle, won't bode well. Apple's stock, after all, is largely driven by emotion and hype. However, currently it's backed up by large leaps in year-over-year operating income, which will continue until it doesn't. (Duh!)

[If you missed my piece in the weekend Wall Street Journal about the sliding sales trend of iPods, and why that may not matter (even though they account for 30% of total revenue), you can read it here at MarketWatch.]

AAPL 1-yr chart:

Comments

[Tom B:]

The thing is, even when the iPod hits saturation and becomes a mature product, it's not like it's going to start losing marketshare to competitors. There really aren't any visible on the horizon. There's a huge barrier to entry: anybody can make a device that plays MP3's, but, so far, only Apple has managed to make a USEFUL device that plays MP3's-- because of the integration to iTunes. Apple is one of the very, very, very tiny number of large companies capable of writing good, easy to use software. You can probably count on one hand the number of members to this club!

2007 Aug 06 09:15 AM

[Jon T:]

I don't even know how he can get to analyse a slide in iPod sales when there was a 21% rise over the previous years quarter..

There is a very distinct and established pattern to iPod sales.

Have a read of this more informed article about iPhone sales but take a look at the iPod graph too.

www.roughlydrafted.com...

2007 Aug 06 11:40 AM

[Neil Anderson:]

One analyst has even pegged Apple stock at over $200!

2007 Aug 07 12:58 PM