Analyst: Apple orders 20-percent increase in Macs, reduces iPod orders

“Following a series of checks with sources in the Far East, researchers for Banc of America have put out a call indicating that Apple has commissioned a significant increase in production of Macs for the current quarter while simultaneously reducing iPod production,” Katie Marsal reports for AppleInsider.

“‘We continue to believe that desktops and notebooks are the key driver of the Apple story,’ analyst Scott Craig wrote in a report to clients Friday. ‘Both desktop and notebook production numbers have moved up by 20%+ from expectations in early January, indicating potentially solid demand thus far in the March quarter, as well as some inventory replenishment,'” Marsal reports. “He added that his checks suggest Mac production numbers will continue to rise throughout the quarter, and that MacBook Air production has also increased slightly since mid-January.”

Marsal reports, “At the same time, however, the analyst noted that iPod production numbers for the March quarter ‘appear to have been significantly reduced, down 10–20% from early January and down 30%+ from early December.'”

Full article here.

If this report is accurate, expect Apple to make moves to stimulate iPod demand sooner than later via aggressive pricing and/or increased features (greater storage on flash-based models).

44 Comments

  1. iPhone and iPod orders have both been reduced. Thie leads me to believe that there is an announcement coming very soon for both products. My guess is an iPod touch with 32 GB of storage and an iPhone with 16 GB. I hope this true because I am waiting for the 16 GB iPhone to make my purchase.

  2. Most likely true. Still, another explanation is that entirely new line might be introduced that would supplant an existing line, reducing the need for heavy volume.

    In the end, most likely reason is Apple’s slow but consistent strategic shift towards the iPhone. In two years, I won’t be surprised if Apple exits the mp3 player business, focusing on the phone. Some dirt-cheap variant of the Touch might continue to exist as a phone-less solution, but it is clear that MP3 player industry is maturing and becoming what CD walkman is now. With portable CD players available for $20 from cheap no-name brands (j-Win, Coby), nobody is making serious profits (certainly not Sony, Panasonic or Aiwa). MP3 player business is just a few years away from that and Apple has no business doing business in razor-thin-margin market.

  3. iPods are a bit stale. The only exciting one is the Touch. But longer term iPod owners have gotten used to storing a great deal of music and, increasingly, viedo on their pods. The Touch just does not hold much. Now a Touch with 120 gigs; that would be exciting.

  4. I would expect iPods will be a big Holiday gift item (i.e., seasonal product), so 20% reduction in iPod should not be a big news. Come October, I would expect Apple to start ramping up iPod production again.

  5. MR, yes, that’s probably it, although the definition of cannibalization I learned in B School doesn’t include cases where you forego sales of one SKU in favor of another SKU with higher margin. In other words, this isn’t really cannibalization. It’s a Good Thing.

  6. I guess we are finally over the iPod glut times.. I hope Apple doesn’t try to Motorolla-ise them in terms of adding unneccessary features just to sell a few more.

    People liked them for their simplicity

  7. The iPod market isn’t declining at all if you include the iPhone as an iPod. And that’s just in terms of numbers.

    In terms of profit, of course, the iPod range produced a 17% increase year on year, thanks to the Touch.

    Apple are very happy with how things are going.

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