iLounge

By LC Angell

Senior Editor, iLounge
Published: Friday, August 26, 2005
News Category: iPod

American Technology Research analyst Shaw Wu believes Apple will ship 7.1 million iPods in the current quarter. The sales number would be a 15 percent increase over last quarter, but Wu warns that average iPod selling prices may come under “greater than expected pressure.”

“We have noticed very aggressive pricing, particularly on 4GB iPod minis”, Wu said in a research note. “We believe part of the reason is that iPod inventories remain relatively high on an absolute basis and this aggressive promotion is to ensure sales in an otherwise slower consumer period.”

The analyst also echoed recent speculation that Samsung is offering Apple heavily discounted prices on its flash memory chips. “Our sources tell us that Samsung was willing to drop its prices aggressively to lock in a marquee customer and win back some business from Toshiba, Apple’s other flash supplier. Interestingly, we believe Apple will also likely source from Hynix, adding a third flash supplier and thus further driving down pricing to protect its gross margin.”

Interestingly, Wu also said that he “is hearing” that Apple will likely source components for future portable devices (including iPods) from Intel, Broadcom and Sharp.