Apple faces spotty shortages of popular iPods

SAN FRANCISCO - Spotty shortages abound for Apple Computer Inc.'s wildly popular iPod digital music players amid Wall Street expectations for a doubling in sales of the devices in the holiday quarter, analysts said.

"I was at an Apple store just yesterday and the place was packed with people looking at iPods and iPod accessories," said Susan Kevorkian, an analyst at IDC in San Mateo, California. "There's no question that iPods are an extremely hot item this holiday season."

Some financial analysts have forecast that Apple will sell 4 million of the market-leading devices in the current quarter, double the number it sold in the previous period, when they accounted for 23 per cent of the Cupertino, California-based company's overall revenue.

"The outages are relatively spotty," said Stephen Baker, an analyst at market research firm NPD Group.

Yet even so, Apple appeared to be largely prepared to meet the demand, Baker said, noting it was more likely that consumers would find the iPod they wanted at a retailer rather than at online stores such as Amazon.com Inc.

"If they sold two million last quarter and they're going to sell four million this quarter, that puts an awful lot of stress on the supply chain," said Stephen Baker, an analyst at market research firm NPD Group. "They'd have to build all those extra ones for quite a while, going back into the summer."

While the iPod mini is still very popular -- there was a six-week wait when they were first available -- it's the 20-gigabyte iPod that's topping iPod wish lists this year, analysts said. The 20-gigabyte iPod costs $299 and can store as many as 5,000 songs.

Amazon.com's iPod store said that the 20-gigabyte gizmo would be "in stock soon" while Apple's online store indicated the same device ships in an estimated one to three business days. However, Retail Circuit City Stores Inc.'s website showed on Wednesday that the 20-gigabyte iPod was "temporarily unavailable for shipping."

"There is a kind of cachet around the original white iPod," Kevorkian said.

For instance, at one Apple store in San Francisco on Wednesday, customers were advised to show up by 5 p.m. that day if they wanted one of the store's remaining 20-gigabyte iPod, while there were plenty of iPod minis available, in all five colors.

Also, if consumers can't find the Apple iPod they want from a store or online, they can consider the "Apple iPod from HP" from Hewlett-Packard Co, which resells the iPod. HP's online store showed that the 20-gigabyte version would ship the same day as purchased.

"People are going to have to look around a little bit more," Kevorkian said, noting one possible downside for Apple in light of strong demand and reports of shortages: "Unfortunately the upshot of all this publicity may be people just giving up and deciding not to try to get one."

Apple executives on its most recent conference call told analysts that the company was not experiencing widespread component shortages that had hurt supply in the past and that production volumes were improving.

"We are confident that we'll achieve a marked increase in the overall supply" during the first quarter, Tim Cook, Apple's head of worldwide sales and operations, said on the call. "But frankly, the demand on this is very difficult to call."

Apple won't disclose how many iPods it sold until mid-January, when it posts its fiscal first quarter results, but executives may be taken aback by the final tally.

"Maybe even Apple might be surprised at the demand for this thing," said Mike McGuire, an analyst at GartnerG2.

- REUTERS