Flawed but Hip iPods Still Draw Converts

Apple's iPod is clearly becoming less compelling as a product range, but will still deliver 20 million Windows switchers a year to the Apple fold, an analyst said.

Needham & Co. analyst Charlie Wolf explains, "It's important to place the iPod in perspective. Through the iPod halo effect, it continues to convert Windows users to the Mac platform -- but the product has reached the mature phase of its life cycle with annual sales of 50 million units, slowing to a high single/low double-digit growth rate."

The analyst notes the product continues to gain marketshare in some territories, and added, "We estimate that 20 million or more Windows users will join the iPod nation annually over the next few years and potentially fall under the sway of the iPod halo effect, which is great for Mac sales."

In related news, American Technology Research analyst Shaw Wu last week warned that Apple's recently-revealed iPod touch price cut may not go far enough, saying: "While we are pleased to see lower pricing, we are concerned that price points may remain too high given the tough macroeconomic environment and relative to the 3G iPhone at $199 and $299."

Wu expects Apple to sell 11 million iPods in the current (September) quarter and 24 million in the ever-active Christmas/December quarter. And the analyst also pointed out that while the iPod is a mature product, the company still has plenty of growth opportunities in its Mac and its iPhone segments - and that despite recession, "enough high-end consumers are still buying tech..."

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