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Tuesday, September 13, 2005, 07:00 am PT (10:00 am ET)

iPod nano sales off to slow start

First week sales of Apple's new shockingly thin iPod nano have fallen short of expectations, with most Apple retail stores having sold only one-fourth of their initial inventory of the players, AppleInsider has learned

A couple of Apple retail stores in California, which last week received over 1400 iPod nanos, said they sold only a couple of hundred units by Saturday. This despite favorable reviews from both analysts and the media.

"Our checks indicate good, but not great initial sales of iPod nano," said Shaw Wu, an analyst for American Technology Research. "This may be surprising given the consensus view from both the investment community and technology reviewers that the iPod nano would be a big success."

According to the analyst, many Apple stores who were contacted reported selling only 200-500 of their initial 1800-2500 iPod nano allocation. Additionally, Wu confirms earlier reports that the black iPod nano is greatly outselling the white models.

"[The] black-colored ones are outselling the white ones by a great deal," Wu wrote in a research note released to clients on Tuesday. "5 to 1 and in some cases as high as 8 to 1." Coincidentally, these sales ratios completely contrast Apple's initial production ratios of the nano, which reports suggest were 1 black nano for every 5 to 8 white nanos.

AppleInsider's own checks reveal that at least two other retail locations had sold out of the 4GB black model, but retained stock of all other models.

At the same time that sales of the nano appear to be lacking, demand for the now discontinued iPod mini continues to be strong, according to Wu. He notes that the price cuts applied to the mini just prior to the release of the nano have since been retracted.

"We believe iPod nano is a great product and evolutionary step combining the best elements of iPod shuffle, iPod mini, and iPod photo, but we believe Apple may need to make some changes to ensure its success as a high-volume product," Wu added.

The analyst speculates that the iPod maker may need to slash the price of the nano by $50 if sales continue to under-impress.