USA Today: ‘iPod nano a hit’ – analyst predicts 26 million iPods will be sold in next two quarters

Apple computer’s iPod nano “has been in stores for a little over two weeks, but so far, it looks like Apple has another hit on its hands — and another opportunity to crush competitors,” Jefferson Graham reports for USA Today. “Apple has 74% of the digital music device market, according to researcher The NPD Group. Closest rival SanDisk has just 6.4%.”

“Apple wasn’t the first to introduce a digital music player. Rio, Creative Technology and others were active players when Apple unveiled the first iPod in October 2001. But its breakthrough ease of use and sleek design changed the market dynamics,” Graham reports. “So how is it that after four years, no other company has been able to play serious catch-up? ‘Apple may not build the best device, have the best service or software, but they have the best overall solution,’ says Bernie Sepaniak, president of D&M Holdings’ Rio unit. ‘They have complete control over the experience. It’s not enough to have a great device. You have to have all the other pieces.’ Sepaniak should know. As head of Rio, he spent several years competing against Apple. In late August, he decided to throw in the towel. He closed down Rio — maker of the very first MP3 digital music player — saying the market was too capital-intensive for corporate owner D&M Holdings to want to participate anymore.”

“The complete solution Sepaniak talks about ties the iPod to Apple’s iTunes software, which lets users sync their songs to the unit and buy new tunes from the iTunes Music Store,” Graham reports. “Competing devices have different software and send users to music stores such as Napster and Rhapsody that don’t always sync songs with the ease of iTunes and the iPod. ‘The iPod just works,’ says Phil Leigh, an analyst for Inside Digital Media. ‘That’s the secret of its success. It sounds simple, but there’s nothing much more to it.'”

“Some 27 million iPods have been sold in the last four years. Munster predicts sales in the next two quarters will almost equal lifetime sales — 13 million iPods each in the third and fourth quarters — fueled by the Nano, says analyst Gene Munster of securities firm Piper Jaffray,” Graham reports.

Full article here.

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An excellent article and informative from USA Today’s Graham that also covers the Motorola ROKR, the lack of a treat from Microsoft-based WMA music subscription services such as Napster, Real, and Yahoo. Graham also reports that Apple Vice President Greg Joswiak told him that for iPod nano’s launch, there should be none of the ramp up problems Apple had with the iPod mini, “We shipped more of the Nanos than any product in memory,” Joswiak told Graham.

Related articles:
USA Today: Apple’s iPod nano ‘a beautiful piece of hardware’ – but ‘the competition has caught up’ – September 16, 2005
Music lovers make Apple’s iTunes Music Store AAC format the de facto standard for online music – August 28, 2005
Apple’s ‘pure genius’ will soon make iTunes’ portal the ‘number one destination on the Internet’ – July 26, 2005
Apple’s understanding of what really counts makes iPod+iTunes impossible to beat – June 22, 2005
BofA: Apple’s iTunes Music Store and iPods have symbiotic ‘stickiness, protective effect’ – May 12, 2005

19 Comments

  1. Apple may not build the best device, have the best service or software, but they have the best overall solution,’ says Bernie Sepaniak, president of D&M Holdings’ Rio unit

    Rio was fatally outclassed by the iPod, and strapped to WMA, WMP, and the cash-hemorrhaging Napster. Way to kick Apple when they’re down.

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  2. So, USA Today CAN do it when they use the right people, it seems. I’d like to see more like this from Graham and less of the dashed-off tripe from biased and untalented writers in USA Today.

    The guy from Rio knows, “They have complete control over the experience. It’s not enough to have a great device. You have to have all the other pieces.” Just as MacDailyNews said when exposing sad little man Andrew Kantor’s bias.

    USA Today is really a paper of many contradictions. More Graham, less (zero) Kantor, please.

  3. Munster predicts sales in the next two quarters will almost equal lifetime sales — 13 million iPods each in the third and fourth quarters — fueled by the Nano, says analyst Gene Munster of securities firm Piper Jaffray,”
    ———–
    So now analysts have spun around 180º, first proclaiming the imminent end of iPod dominance and now predicting astronomical sales. And when the numbers come out and Apple sold “only” 11 million per quarter instead of 13 million, will they call it a failure?

  4. “So now analysts have spun around 180º, first proclaiming the imminent end of iPod dominance and now predicting astronomical sales. And when the numbers come out and Apple sold “only” 11 million per quarter instead of 13 million, will they call it a failure?”

    Of course they will. First, they grossly underestimate sales and they were burned badly, so now they’re going to try and grossly overestimate them it seems like. Oh well, as long as iPod sales continue to grow, Apple has nothing to worry about in the end.

  5. I’m with Winston on this one. It seems as though this analyst has purposely set the bar so high in hopes of Apple not making it. He’s predicting a two fold increase in sales in one quarter (July-Sept doubles to get 13M in Oct-Dec?). Then the following quarter (Jan-Mar) maintains this.

    Is flash RAM even available in these quantities?

    Anyone confident Apple can do this in the first calendar quarter of 2006 (post holiday buying season)?

    I’m not. I would love for this to happen, but I’m not wildly optimistic it will happen.

  6. Macaday,

    Only for idiots with “Kantor-sized” brains; for the rest of the world, that’s why they make thousands of models of protective iPod cases.

    For “Kantor-sized” brains:
    1. Buy iPod.
    2. Buy iPod case.
    3. Put iPod in iPod case.
    When you take you iPod out of its case, resist urge to bash it repeatedly on your skull or you will scratch your iPod. Place iPod in iPod case before the urge to bash your head hits if you want you iPod to remain free of scratches.

    “Scratching issue.” LOL: Is this all they have left to criticize?

  7. Whatever JB.. But -IF- there is an issue I for one would be more pleased if Apple dealt with it head on…having a cool product and then having to use enclose it is not imo the ideal solution. (No expert myself on the subject which was why I asked the question, but it isn’t hard to stumble across plenty of references to it).

  8. Dear Tucker,
    Apple is still a COMPUTER company, it brings in most of their revenue. But in case you missed the news, there is a processor transition going on from IBM to Intel, so don’t expect any news products any time soon. Tommorrow we might see updated products but that will be it.

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