“According to Dan Frommer of Silicon Alley Insider, the Era of the iPod is over. That dramatic conclusion comes from the limited new iPod unit sales increase year over year in the December quarter; this year, Apple sold just five percent more iPods that it did last winter. However, reality isn’t quite so simple, and there’s no reason to buy into the professional panic being advanced by the usual suspects,” Daniel Eran Dilger writes for RoughlyDrafted.
“It’s hard to be too upset about Apple’s iPod sales. It sold 22,121,000 iPods, which while only five percent more units compared to the winter quarter last year, represented 17 percent higher revenues. That’s because Apple brought a more powerful and expensive iPod to market, the iPod Touch. Brisk sales of the higher end model bumped up revenues and profits and raised the average selling price of iPods in general. Apple enjoyed the highest growth rate in revenue for the iPod in a year,” Dilger writes.
“Another secret that seems to have slipped through the fingers of every analyst on the planet is that the iPhone is also an iPod. It’s essentially an iPod Touch with a camera and a mobile phone. Apple sold 2.3 million iPhones in the winter quarter, so if you add those into the iPod units, you arrive at 24.4 million iPods, which is what analysts were looking for, albeit in the wrong column of the report,” Dilger writes.
“The iPod Touch reinvented what the iPod was going to become in the future. Rather than being a hard drive wrapped in a simple UI, suddenly it charted out a course as a handheld WiFi multitouch mobile computer,” Dilger writes. “To drive that strategy home for investors and analysts, Chief Operating Officer Tim Cook articulated the concept repeatedly in the Q1 conference call. The iPod is no longer just an MP3 player, but is now ‘the first mainstream WiFi platform for mobile applications.'”
Apple “blew away expectations for Mac shipments, iPhone sales, and exceeded its guidance for iPod sales. Analysts’ response has been to bewail the fact that the company didn’t meet even higher expectations for iPods set by speculators or exceed fanciful “whisper numbers” based more on optimistic conjecture than solid research,” Dilger writes.
“What drove down Apple’s stock price in aftermarket trading was the company’s more conservative guidance for revenue and earnings in Q2, which ends in March. The company forecast sales of $6.8 billion and earnings per share of 94 cents, below analysts’ consensus expectation of earnings of $1.09 per share on sales of $7.0 billion,” Dilger writes. “Clearly, Apple would rather impress than disappoint.”
Much more in the full article here.