iPod shuffle sales, marketshare fall

Weaker than expected sales of the shuffles has market sources wondering what Samsung Electronics will do with the large proportion of NAND flash chips it has allotted for Apple, according to DigiTimes.

The overseas publication, which keeps a close eye on Apple's Taiwanese component suppliers and manufacturing partners, cites unnamed sources who say sales of the digital music player are not justifying the supply forecasts for NAND flash that Apple has secured from Samsung.

If Apple is forced to cancel or reduce orders, Samsung may release even more NAND flash chips into a market already being affected by an influx of new NAND flash producers, the report adds.

As a result, flash prices may drop by up to 40 percent in the future, according to Peter Shu, chairman of Transcend Information.

Meanwhile, slowing sales of iPod shuffles are also having an adverse affect on Apple's share of the flash-based digital music player market, notes Macworld UK.

According to new data from NPD Techworld, Apple's share of flash players in the US, which stood at 58.2 per cent in March, declined to 52 per cent in May. June data is not readily available.

The slowing in demand for Apple's iPod players, specifically the iPod shuffle, can be attributed to a number of factors sources say, including: seasonality, more efficient production methods and a lack of new offerings.

However, sources close to Apple say it is only a matter of weeks before the company begins to introduce its summer hardware line, which is expected to include updates to at least one family of iPods.

In recent months, Wall Street analysts have been abuzz over reports of new iPod shuffles, which will reportedly pack 2GB of storage space and possibly a small display screen.

In the meantime, it appears that Apple has dropped its payload of existing shuffles on its reseller channels in hopes of depleting inventory before introducing new models.