Here’s another take on Apple’s (AAPL) iPod business: A report released this morning by FTN Equity Capital Markets analyst Bill Fearnley Jr. says most retailers saw iPod sales exceed their expectations in July. This is different than a report last week suggesting that July iPod sales were below Street expectations. (More on that below.)
Fearnley surveys retailers across the country to derive a “net” per cent of contacts that either saw sales above or below expectations. For example, a net 5% of contacts seeing better than expected results means 5% more retailers saw better-than-expected sales than those surveyed who saw sales below expectations.
Here is a summary of some of the results:
- A net 27% of contacts said iPod sales were above plan in July. This is an improvement on 7% in June and 13% below plan in May. Many retailers pointed to the recent education bundle plan offered by Apple, which offers a rebate to consumers who purchase a Mac and participating iPod.
- 62% of retailers said the iPod Classic or Touch was the best-selling product in July, up significantly from 53% in June. 30% of retailers said the cheaper Nano was their best-selling product, down from 38% in June and a high of 47% at the end of 2008.
- iPhone retailers continued to struggle maintaining enough inventory to match demand, but said supply was improving. Most said inventory was being replenished a couple days after it ran out, an improvement over June and May.
While retailers may be seeing better than expected results, this report is not in agreement with data and sentiment published last week.
In that report, iPod sales were down 17% year-over-year in July, according to NPD Group, which is “slightly below Street thinking,” Piper Jaffray analyst Gene Munster said at the time. The Street expects Apple’s iPod business to shrink 10% year-over-year this quarter.
Perhaps the difference here is that the retailers surveyed by Fearnley — who have been sacked with a terrible summer — have lower expectations for iPod sales than analysts who cover Apple, which has been putting up excellent numbers throughout the recession.
Apple is expected to announce a new iPod touch in early September, which should help sales. Here’s what it reportedly looks like.
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