iPod revenue growth doesn’t move in lockstep with iPod unit growth. Last quarter, Apple sold 22.1 million iPods, just 5% more than it did the previous December quarter. But the same quarter, iPod revenue growth increased 17% year-over-year. Why? The new, high-end iPod touch jacked up the average revenue/unit 11% y/y from $163 to $181. (See our spreadsheet.)
This quarter, Piper Jaffray analyst Gene Munster expects Apple to sell 11.3 million iPods, up 7% y/y and an acceleration over last quarter’s 5% y/y growth. But he expects the cheaper iPod shuffles to lower Apple’s average sales price, reducing y/y iPod revenue growth to 12%. That’s better than the lousy y/y iPod revenue growth Apple saw most of 2007, but a deceleration from last quarter.
Going forward, Munster expects Apple’s iPod growth to come from cheaper, wi-fi-enabled, touchscreen iPods. That could bring the average unit price down even more — bottoming around $157 later this year, he estimates. But he expects higher unit sales to boost revenue growth for the next few quarters.
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