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Monday, September 19, 2005, 08:00 am PT (11:00 am ET)

Second weekend 4GB iPod nano sales strong

Despite earlier reports of mediocre demand for Apple's new iPod nano, sales of the 4GB model proved to be strong during the player's second weekend of availability at US retail stores.

In fact, sales of Apple's iPods and consumer Macs appear to be "solid" during the month of September even in the wake of higher fuel prices, says UBS Investment Research analyst Ben Reitzes.

In a research note released to clients on Monday, the analyst said his visits to retailers like CompUSA, as well as several Apple stores, indicates that the back to school season is going well for Apple due to strong demand for iBooks and iMacs. Further checks reveal that certain Apple stores actually ran out of iBook inventory in the middle of the back-to-school rush.

Commenting on iPod nano performance, Reitzes says,"While 2GB versions do not seem as popular, 4GB iPod nano sales appear to be off to a strong start as many Apple stores across the country struggle to keep devices in stock (especially black versions)."

However, the analyst notes he was able to find inventory of the 4GB iPod nano in BestBuy electronics stores before the weekend, indicating that customers are flocking to Apple retail stores first to make purchases. Independently, AppleInsider has received word that Apple this weekend was able to ship a significant number of nanos to Apple authorized retailers and online retail outlets such as Amazon.com.

Reports show that the company is shipping one black nano for every 3 white nanos and appears poised to catch up with demand over the next few weeks. Already Amazon is showing availability of both the 2GB iPod nano and 4GB iPod nano in white.

Still, Apple continues to express weakness in gauging demand for its new iPod accessories, which produce the company hefty profit margins. The iPod nano dock remains on backorder for 1-2 weeks, while both lanyard headphones and multi-colored nano tube cases are seeing wait times of 4 to 6 weeks.

According to Reitzes, discussions with Apple store managers indicated that the best seller in the iPod line prior to the launch of the nano had been the $199 4GB iPod Mini, with the slowest sellers being the 20GB and 60GB iPod, followed by the Shuffle.

"Managers attributed Shuffle weakness to customers looking for higher memory devices with a display," the analyst said. "We witnessed a clear increase in Shuffle inventory in a few of the stores we visited, with one store having a fairly large inventory on display (about 20 devices) vs. a noticeably smaller stock of Minis."

Even with the launch of the nano, Reitzes believes Apple will continue to sell stock of the iPod mini for another 3 to 4 weeks.