Analysts See Apple Gains In iPod Lineup

By Joseph Palenchar On Sep 13 2010 - 4:01am

SAN FRANCISCO – Apple’s revamped iPod lineup could help maintain iPod Touch unit-sales growth worldwide and perhaps slow or stop the worldwide decline in overall iPod unit sales, analysts told TWICE.

The addition of FaceTime video chat and online multiplayer gaming are two key features that could increase the Touch’s already strong sales momentum, analysts said. “Whereas the iPod Touch underwent the least physical change from the last iteration, the addition of the FaceTime camera really opens the door to an affordable, massmarket videoconferencing option over Wi-Fi,” said Ross Rubin, executive director of industry analysis for consumer technology at The NPD Group.

Yankee Group analyst Carl Howe noted that the Touch’s rising share of iPod unit sales has already been raising the average selling prices of iPods and the new features could help continue to raise the Touch’s share of sales.

Sales of the Touch grew 48 percent in units during Apple’s fiscal third quarter ending June 26, boosting the average selling price of iPods worldwide by 12 percent year over year and boosting overall third-quarter iPod revenue by 4 percent year over year to $1.5 million, company reports show. During those three quarters, worldwide iPod unit sales fell 6.3 percent to 41.3 million.

The new Touch, combined with the new Nano and Shuffle, might help stem the overall unit-sales decline, Howe noted. “This is protecting their existing base and possibly expanding it to people who are looking for something smaller and more fashionable,” he said of the redesigned Nano and Shuffle. “Apple is practically making electronic jewelry.” Adding a clip to the downsized Nano also makes it more attractive to women who often don’t have pockets to place their Nano in while listening to it, he added.

Apple also has a clearer strategy to step consumers up to the Touch, Rubin added. “The new lineup adds more rationality to the product line by putting still and video capture in the high end of the line [Touch] as opposed to the midrange Nano, where it has been removed,” he explained.

Sales of the tiny Shuffle could also gain because control buttons are back on the Shuffle’s body, analysts noted. “The addition of the buttons back on the iPod Shuffle show that it is sometimes possible to make a device too small,” Rubin said. The previous Shuffle featured controls in the earphone cable to play, pause, adjust volume and switch playlists.

In launching what CEO Steve Jobs called the “the biggest change in the iPod lineup ever,” Apple enhanced the Touch by adding the iPhone 4’s Retina display, multiplayer gaming via the new iOS 4.1 OS, a front-facing camera for use with the company’s FaceTime video-chat application, and a rearfacing camera/camcorder that captures HD video but has no flash.

The Touch also got the iPad’s 1GHz Apple A4 chip, a three-axis gyro for better game play, and extended music playback time of 40 hours on a single charge. Like before, the Touch is available in three capacities: 8GB at $229, 32GB at $299, and 64GB at $399.

Apple downsized the Nano by 46 percent, made it square, added an aluminum and glass body, and in place of a clickwheel added a multitouch touchcreen that users can manually reorient. It adds a belt clip and carries over its predecessor’s FM tuner, video and picture storage, pedometer, and Nike+ feature. Prices held steady at $149 for the 8GB version and $179 for the 16GB version.

The Shuffle, which morphed into an aluminum square, got back clickable buttons to control select features. Like before, the Shuffle lacks a display and features VoiceOver. The new model now comes in only one capacity: 2GB at $49.