Robert W. Baird & Co. is reporting that their “checks indicate very weak NOR flash-memory bookings for the month of December, in sharp contrast with the third quarter, and suggesting a drastic reduction in lead times,” Tristan Gerra, Dylan C. Moore and Scott Hirleman report for Barrons.
“NOR flash trends tend to correlate with other commodity products such as low-end analog and 8-bit microcontrollers. Several semiconductor companies are already implementing tight expenses control and/or hiring freezes, also per our checks,” Gerra, Moore and Hirleman report. “In NAND flash, we are getting additional feedback about weak iPod 8-gigbyte nano sales, suggesting further pricing weakness in November. Following our estimate reductions on 11 semiconductor names last Tuesday, we are today downgrading STMicroelectronics shares to Neutral from Outperform and reducing our estimates and price target on SanDisk.”
Full article (subscription required) here.
As many expected, and most probably as Apple intended (due to possible 8GB flash memory supply constraints and/or enticing people to get a video-capable iPod unit), $249 for an 8GB iPod nano vs. $249 for a 30GB iPod is a perfect recipe for cannibalization of 8GB iPod nano units by 30GB iPods.
[UPDATE: 1:04pm EST: Added “due to possible 8GB flash memory supply constraints and/or enticing people to get a video-capable iPod unit” to “Take.”]
As usual, the analyst is saying stuff without actually saying anything – First, Apple/steve jobs is smarter than this guy. Clearly by grouping the colors at 4 GB, Apple knows these will be the best sellers. The 8 GB version is sold as a slight premium because some people will pay it just to be the top but it’s also to answer anyone who might only want the highest available NAND drive – Apple offers an option that’s smaller and better than any others at 8GB. But it’s also priced for those who do analysis by GB – clearly the “regular” ipod is a better buy but the option is there if you want a smaller AND flash drive player – Apple has it covered and is making money on all the sizes no matter what attributes you deem most important …
Oops, forgot one last bit – by December it’s too late to ship anything except by plane so if you have to run out of any ipods, make sure it’s the most expensive and highest margins ones …
>It’s an artform at this point, and Apple has it down pat.
Yep, don’t think that the late arrival of the 2G shuffle was a ‘mistake’ either, Apple made sure they didn’t cannibalize new Nano sales. And with the 7.0.2 itunes update installed, I don’t have to worry about the lack of a CD in the shuffle box…it’s already here and loaded on my machine, waiting for me to buy one this friday… Down pat indeed.
NOT AN APPLE EMPLOYEE
don’t walk, RUN to slap a copyright, and trademark on New iThingy
lol, the best ‘i’ name in forever!
The 8GB Nano may cost the same as the 30GB iPod; but this doesn’t alter the fact that—for many people, myself included— the smaller form factor is perfect. The difference in size and weight is actually much greater than one might expect from just comparing specs. One feels like it’s hardly there in your pocket; the other is an obvious, bulky presence. I paid $249 for my 4GB Nano and would do it again; so 8GB for the same price looks like a sweet deal to me.
Faced with a decision to buy a nano or a shuffle, and given the relatively high prices of the nanos, I opted for a new shuffle which is headed from Alaska to Canada via the U.S. There is no way an 8 gig nano will hold more than a fraction of the music in my iTunes files, so I will be faced with choosing up to 1 gig of content whenever I decide to wear my shuffle. My 30 gig iPod has filled up already, almost all with music, and it’s great for plugging into the car stereo or home stereo. But the shuffle is far less likely to incur accidental damage, and I predict that its market will be absolutely phenomenal. For those who think music is shuffled on a shuffle, they need to know that it can be played in sequence as well. As for the nanos, from my perspective, it’s either the shuffle (C$87) or the 80 gig iPod, the one for wearing and the other for the big collection of data.
Apple’s market share of 77% is about to rise as the shuffle takes over the world. Apple should raise the shuffle to 2 gigs. for people who don’t want to watch their music. Listening works for me.