Apple Tops Amazon Bestsellers, But Trouble Brewing Ahead?
Apple has managed to place 5 iPods in the Amazon.com overall electronics bestsellers list, take 5 spots in the desktop bestsellers list, and slot 2 Macbooks in the notebook bestsellers list. Perhaps most surprising is the positive consumer response to iPod Touch, which was criticized for its low flash memory capacity and still managed to sell out in some stores, and iMac models, which faced some early quality control issues. Clearly, as the Amazon lists and crowded Apple stores show, Apple products are in hot demand and the upcoming quarterly earnings report will reflect this.
Sales of other media player brands, however, did not fare as well. According to the NPD Group, sales of portable media players fell during the all important November 18th through December 9th period by an average of 16 percent compared to 2006. NPD, which is a market research and analysis group, says the decline is mainly due to market saturation. In other words, people who can afford portable media players already have purchased one or more units. One exception to this trend was the iPod but NPD says even Apple iPod growth has slowed down significantly.
The strong pre-Christmas iPod and Mac sales were partly due to unusually generous merchant discounts. In previous years, I don’t recall discounts of 10% off iPods and up to $150 off Macs so early after the introduction of newer models. Mac sales were also helped by the release of a new Apple operating system. What happens, though, to iPod sales in the softer first and second calendar quarters of 2008, after the discounts end? Can the iPods continue to buck the trend of lower portable media player sales despite the inevitable reality of market saturation? I believe Apple can answer the challenge of lower sales by updating iPods more often to maintain consumer interest ( every 6 months instead of the normal 12 ) and by introducing new product segments to keep its revenue stream flowing.