Yahoo News reports sales of Apple's iPod players are significantly slowing down:
Analysts question whether Apple can offset slowing iPod sales with rising sales of other products and services.
Apple sold 22.1 million iPods in the fiscal 2008 first quarter that ended Dec.29. Analysts were expecting 24 million to 25 million.
Unit sales were up just 5% from the year-ago period, the fourth straight quarter of decelerating iPod unit sales, from 50% in first quarter 2007, to 24% in the second quarter, to 21% in the third and 17% in the fourth.
On the other hand, iPod sales are skewing toward the higher-end models like the new iPod Touch, which starts at $299. The average selling price for iPods was $181 last quarter, vs. $159 one quarter earlier. Revenue from iPod sales rose 17% last quarter from the year-earlier quarter.
But the product is being buoyed by existing customers upgrading to newer models, rather than sales to new customers.
"A lot of the sales are replacement sales," said Steve Biggs, an analyst with Zacks Investment Research. "Whether we've reached the saturation point 14 iPods, they've got to focus on other areas."