“If recent developments are any indication, Apple could have sour news for investors when it reports earnings next week. Announcements from two companies in the digital music player sector — and even from Apple itself — suggest that demand has slowed in recent months,” Troy Wolverton writes for TheStreet.com.
Wolverton comes to this conclusion because SigmaTel, which makes flash-memory for low-end music players cut its second quarter revenue estimates. Wolverton reports, “Company officials declined to say whether Apple, which uses SigmaTel chips in its iPod shuffle players, was among those customers whose sales slowed, but the company did say the slowdown was ‘broad-based.'”
SigmaTel’s announcement came one day after Creative Technology cut its own revenue outlook due to a shortfall on weaker-than-expected demand.
MacDailyNews Take: So, maybe nobody wants flash-based Creative players because they want iPod shuffles?
Wolverton continues the doom and gloom by writing that Apple’s recent price cuts “may point to slow demand at Apple for those products, if not for the company’s whole iPod lineup, analysts say.”
Wolverton does report that “NPD analyst Stephen Baker argues that the problems at SigmaTel and Creative are likely company-specific and don’t reflect a broader market problem. Apple’s move to cut prices and build inventory may simply be a strategic effort to maintain its dominance of the digital player market.”
Wolverton warns that if analysts like Baker are wrong, “what may be a sour taste in the mouth of Apple investors next week could turn bitter.”
Full article here.
MacDailyNews Take: Creative is spiraling down the bowl, so Apple is, too? Sorry, like Creative digital music players, we’re not buying. We’ll stick with First Albany which currently forecasts 5 million iPod units, Goldman Sachs which estimates 5.35 million iPod units, and Piper Jaffray which estimates 5.5 million iPod units this quarter.
Apple sold 5.311 million iPod units during its fiscal 2005 second quarter ended March 26, 2005 and 4.58 million iPod units during its fiscal 2005 first quarter ended December 25, 2004. In its fiscal 2004 fourth quarter ended September 25, 2004, Apple sold 2.016 million iPod units.
Apple is due to report quarterly results on July 13th.
Related MacDailyNews articles:
Apple to webcast third quarter 2005 financial results conference call on July 13 – July 05, 2005
First Albany raises Apple earnings, sales, iPod forecasts, cuts Mac mini forecast – July 05, 2005
Apple iPod sales humming right along in Australia – July 05, 2005
Apple cuts iPod prices to grab market share; analyst estimates 35 million iPods shipped by year end – June 29, 2005
Apple passed 20 million iPods sold milestone in early June – June 24, 2005
Piper raises Apple estimates on Mac sales strength; estimates 5.5 million iPods shipped this quarter – May 26, 2005
why oh why do they keep wanting to pee in Steves cornflakes? sure there might be a drop… but the holidays are a’comin’! after that we’ll see just who’s left standing…
Good morning Temput Fugit! How ya doing?
Troy Wolverton is a poor excuse for tech writer. He wrote basically the same article for theStreet.com about 2 weeks ago. He merely changed a few names around.
Me thinks he’s a M$ apologist. Look for First Albany et al to hit the home run.
It is rational to assume that iPod sales will be cyclical. They will move in waves. iPods are similar in nature to PDAs as far as consumers are concerned. By this I mean those who want them will buy them. After that Apple will have to wait for those same consumers to decide to upgrade because their existing iPods are either lost, stolen, or obsolete. Many but not all of those consumers will buy a new iPod if and when the new iPods do something significantly different, such as video I suppose.
My next door neighbor dropped her iPod. So she bought a new one. My other next door neighbor has no interest in an iPod and will not likely ever buy one.
iPods are a big ticket item for most consumers. Kids won’t be getting new iPods for Christmas this year, if their existing iPods are just fine. I’ve got the original iPod photo. There is nothing about the current crop of iPods that compels me to purchase another.
I believe analysts who are considering this are correct. iPod will possibly peak again in a couple of years.
If you give me a 200 gig iPod that I can rip a commercial DVD to, well then you’ve got my interest.
theStreet.com is a joke–what’s the point of reading them if they publish articles by this guy?
I used to like them–too bad.
I would think that it would be a pretty good quarter for iPods, as they are a good and relatively affordable gift item for Mothers Day, Fathers Day, or graduation.
All in all, it should be a stronger quarter for an item like this than the Jan-Mar quarter was.
From: MikeR:
“Good morning Temput Fugit! How ya doing?”
jus’ chillin’, bruddah… jus’ chillin’…
wrote the same article for theStreet? sounds like the work of a two-bit hack if you ask me.
Indications are that iPod sales will beat last quarter.
Wolverton has written several articles over the last few months which are compilations of naive comments, spin doctoring, and uninformed speculation by other analysts and corporate spokespeople, picking and choosing those that fit the slant he wants, which is usually to slam Apple. I think he feels he’ll get more attention being a contrarian when it comes to Apple, but more attention is not a good thing when you’re exhibiting a high level of ignorance.
All the investors show better than expected earnings and give Apple stock a buy recommendation. The iPod and iTunes can’t be compared to any of the competitors because they can’t compete period. They have lousy interfaces, use IE6 so your guaranteed to get viruses if your using a PC which also locks Mac users out. All of the others keep Mac users out while iTunes is PC & Mac which is why sales are booming at iTunes.
“…more attention is not a good thing when you’re exhibiting a high level of ignorance.”
tru’ dat… tru’ dat.
My experience in a large retail chain that sells iPods is that this is a load of hooey!!! We ran out of all iPods and iPod minis a couple of weeks ago, we MIGHT get 6 silver 6Gb minis today and IF they come in they will be gone by the end of the day. At least half if not two thirds of our foot traffic is looking for an iPod and the same with phone enquiries. We have shuffles because we bought a case of each size! That is consistent with all 60 stores in our chain, so there is no lack of demand for them. The demand is there the problem is supply, you think that would up Apple’s stock!
Frankly, what it does show is the stupidity of the stock market where the value of stock rises and falls based on innuendo and not fact. The market is founded on Fear and Greed the basest of all human instincts, the whole thing is pathetic. S&P = stupid and pathetic