iPod margins slipping as nano, shuffle sales rise

Despite soaring iPod sales, analysts believe that the popularity of lower-cost nanos and shuffles will result in Apple’s first year-over-year decline in iPod revenue. Bernstein Research analyst Toni Sacconaghi estimates that Apple sold 17.5 million iPods during the holiday quarter, a 25 percent increase compared with last year, but likely at lower prices. “We believe the first ever y/y decline in iPod revenues may be unexpected for some investors,” the analyst wrote in a research note Friday. Sacconaghi estimates that the average sales price declined 22 percent, to $161 from $207, in the quarter compared with a year ago. Apple’s $79 shuffle accounted for 21 percent of all U.S. iPod sales in November, according to the NPD Group. The nano made up 51 percent of iPod sales during the month.