Apple iPod demand outpacing supply?

Apple’s new players are hot sellers, judging from the more than 1 million video downloads so far,” Arik Hesseldahl writes for BusinessWeek. “Just one problem: Is demand outpacing supply?”

Hesseldahl writes, “In its early weeks on the market, Apple’s latest digital-media player is meeting with success — so much so, that demand may be outstripping supply. Apple Computer said on Oct. 31 that customers have snapped up more than 1 million of the video downloads that are playable on the company’s video iPod, which hit the market two weeks ago. Some investors took the announcement as a suggestion that uptake of the new units is strong. Apple’s share price jumped $3.12, or 5.7%, to $57.59 by market close on Oct. 31.”

Hesseldahl writes, “Apple hasn’t yet said how many of the new players it has sold since the units started shipping Oct. 17, but clues are mounting that there simply aren’t enough around. It’s taking Apple between five and seven business days to fill online orders for the video iPod, according to the company’s Web site. ‘They can’t seem to build them fast enough,’ says analyst Shaw Wu of American Technology Research in San Francisco. It’s taking the company 1 to 3 days to fill orders for the 4-gigbyte nano and about 24 hours for the 2-gigabyte version as well as the smaller Shuffles.”

Hesseldahl writes, “if you were to assume each new iPod owner has downloaded between 5 and 10 videos, you would probably arrive at a number somewhere between 100,000 and 200,000 units sold in the iPod’s first few weeks on the market.”

Full article here.

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Hessedahl fails to include the number of video downloads by iTunes Music Store (iTMS) customers who don’t own 5th generation video-capable iPods. Just as you don’t need an iPod to listen to music purchased via Apple’s iTMS, you don’t need a new iPod to watch the videos. They play right in iTunes via QuickTime on Macs and Windows PCs and that video content, by the way, can also be outputted to monitors and TVs.

Related article:
Report: Extremely strong demand seen for Apple iPod, iPod nano, iPod shuffle units – October 31, 2005
Enjoying Apple’s iTunes and iTunes Music Store without owning an iPod – May 11, 2005

15 Comments

  1. “Hesseldahl writes, “if you were to assume each new iPod owner has downloaded between 5 and 10 videos, you would probably arrive at a number somewhere between 100,000 and 200,000 units sold in the iPod’s first few weeks on the market.”

    Is this guy smoking pencil shavings, or what? They pay these guys for this??

  2. Quite agree WM, on what basis does he make these ASSumptions?

    MDW: Analysis, as in “Statistical Analysis”.

    Go to school dude. No, really…yeah, I mean it…sheesh… ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  3. So, what’s wrong with his assumptions?

    Do you think that people who own G5 iPods would be snapping up more than 10 videos? Then that means fewer iPods sold.

    Or do you think people with G5 iPods have only bought 1 or 2 videos? More iPods sold, but 1 or 2 videos purchased over a three week period? That may not be all that good of news.

    So biotch all you want — his numbers actually paint the best picture, IMO.

    MW: boys, as in Little boys tend to speak before they think.

  4. I would say that probably at least half have bought none, maybe a quarter have bought one to try out the quality and the rest have bought the bulk of the songs. That said, I bought one and I don’t have a 5G. So basically, I have no way of working out how many iPods have been sold based on the number of videos sold. I’ll guess at 5 million. Can I have a job as an analyst please?

  5. > Apple’s new players are hot sellers, judging from the more than 1 million video downloads so far,

    do you think people might be watching videos on their computer screens… that is allowed too you know!

  6. The maths are relatively simple:

    (N-Y)Z / T = I

    Where:
    N is number of movies sold
    Y is number of movies sold to people who haven’t bought 5G ipods
    Z is average number of movies per 5G ipod sold
    T is the time period
    I is number 5G ipods sold

    Now, all the guy knows, at best is N, he’s totally forgotten about Y, and he’s “assuming” Z based on no previous experience whatsoever. The basis of probability and statistics is experience. I agree if we had past quarterly figures on downloads pere ipod, and we had past experience of the percentage of downloaders who bought new ipods, we could use those to work out number of ipods. But we have no such experience, therefore no basis for “assuming” what Y and Z are. We don’t know if Z is 0.1, 1.0 or 10 per time period.

    If he managed to guess right, it would in fact only be because he has already guessed “I” on known media projections, and he’s fudging the figures based on that. (Smoke and mirrors). In which case it’s all a deception, he’s working backwards from projected iPod sales and is not actually “calculating” iPod sales at all.

    Can’t believe I wasted time doing this!! (Hope noone reads it) ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  7. Forget the math. Check out the Amazon Top Sellers list for “Portable Audio and Video” at http://tinyurl.com/c6udk.

    Apple players occupy 9 of the top 10 slots, and only the 2 GB Black Nano is out of stock, the rest say “Usually ships in 24 hours.” The three video models in the top ten all ship in 24 hours.

  8. your equation is slightly wrong. (N – Y)/Z gives you the number of iPods sold. Dividing by the time obviously gives you the RATE at which they are being sold.

    I would guess the fast majority of videos have been bought by people who haven’t bought 5G iPods. I’ve bought two videos and no 5G iPods. Then again I can’t be sure about it, but there is no reason my numbers should be any less acurate than this analysts, I am at least a real mac user and mac fan boy.

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