Apple iPod sales might be plateauing, what’s new in Apple’s pipeline that will ignite growth?

“The torrid gains from iPod sales may soon be a thing of the past. Is there something new in the pipeline to stoke growth? As Apple Computer prepares to announce third-quarter earnings July 13, there’s a growing sense even among the company’s most avid fans that the iPod party is ending. Yes, some analysts are predicting a quarterly revenue number slightly higher than Wall Street’s consensus of $3.3 billion, but few are predicting any new blowouts,” Sarah Lacy writes for BusinessWeek.

Lacy writes, “The consensus among analysts is that iPod sales compared to the previous quarter will be flat, at roughly 5 million units. From a device that has boosted Apple’s revenues 148% since 2001, signs of a plateau are clear. Come January, 2006, Apple investors had best beware. With every passing quarter, the company that set the music world on fire with the iPod is in greater need of an encore, most analysts who cover the company believe. Computers likely won’t pick up the slack. Mac sales are expected to grow 26% in 2005, then slow to just a 6% pace in 2006, according to Goldman Sachs. And iPod’s sales growth is expected to cool from a sizzling 234% in 2005 to just 18% in 2006.”

Full article here.

MacDailyNews Take: Remember, The Street really only cares about growth. Of course, Apple has more than a decent chance of coming up with an innovative product to ignite growth; this is, after all, the company that has already changed the world three times (Apple II, Mac, iPod). Do not underestimate the Mac. The growth potential for the Mac platform is enormous.

Related MacDailyNews articles:
Wall Street wants to see Apple grow iPod unit sales – July 13, 2005
Report: Apple to benefit from Intel chip switch; Mac sales on the rise – July 13, 2005
Comprehensive survey shows ‘iPod Halo Effect’ is increasing Apple Mac sales, market share – July 12, 2005
Smartmoney.com article sounds stupid about Apple’s ‘iPod Halo Effect’ – July 12, 2005
SG Cowen survey shows evidence of a significant iPod halo effect boosting Apple Mac sales – July 12, 2005
Analysts expect Apple to post $3.33 billion in revenue for Q3-2005 on July 13 – July 07, 2005
Merrill Lynch: Mac sales ‘appear robust,’ expects futher evidence of ‘iPod Halo Effect’ – July 07, 2005
BofA raises Apple earnings estimates, forecasts 5.4 million iPods, 28-percent Mac growth for quarter – July 07, 2005
TheStreet.com dubiously concludes that iPod demand has slowed, could impact Apple earnings – July 06, 2005
J.P. Morgan raises Apple estimates based on ‘more optimistic’ Mac shipments – July 05, 2005
First Albany raises Apple earnings, sales, iPod forecasts, cuts Mac mini forecast – July 05, 2005
Apple to webcast third quarter 2005 financial results conference call on July 13 – July 05, 2005
RealMoney: Apple’s iPod Halo Effect ‘quite profound,’ Macs taking good market share from Wintel – June 27, 2005
Morgan Stanley: Apple’s ‘iPod Halo Effect’ is ‘roughly double what the market expects’ – March 18, 2005

19 Comments

  1. At a time when a lot of good companies would beg for 5-7% year over year growth, Apple has managed to go way beyond this. Even after the first quarter any GOOD analyst could and should have seen that no company could keep up that sort of sustained growth. Why do you think Microsoft stock has bascially been at $25/share for however many years. No matter how big or popular your company or product is, there are limits to growth and those limits are usually bound by market size (population) and disposable income which are both finite amounts.

    Apple’s doing just fine. If they barely make estimates and the stock drops, it’s just a buying opportunity for those who see long term potential, which I think Apple has plenty of.

  2. I don’t get it, unless things are drastically different in the marketplace in the US. We have no iPods on the shelf and desparately WANT them, NONE of the major retailers in a city of close to one million has an iPod, only a few shuffles. Our warehouse for a chain of 60 stores doesn’t have any iPods. Yet two thirds of all walk-in trafffic and two-thirds of all phone inquiries are requests for iPod and iPod minis, if you have a “glut” in the US please PLEASE send them to us! We’d love to sell them, I’m tired of looking at empty shelves!

    As I said before don’t espect rationality from Wall Street, neither fear or greed is rational.

    Thumbs up for “The Corporation” the psychopathology of the market is well documented!

  3. The pundits as usual are completely wrong. There is no indication that iPod sales have plateaued at all. Apple is still hitting on all cylinders. The third quarter is supposed to be a bad quarter for computer sales. Apple defies all expectations.

    My prediction, shares will fall tomorrow. They always do for Apple after an earnings announcement.

  4. Of course Wall Street is amazed Apple didn’t go out of business years ago. ” Apple is making money how could that be, their suppost to go out of business, it must be a fluke.”
    A lot of newspaper writers are morons but the one “covering” finance are the worst (althought those “covering” politics are pretty bad too). We shouldn’t get all bent out of shape they say something stupid, its a waste of time. When they are wrong it doesn’t matter their just writers.

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