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New 4GB iPod nano fetches over $350 on eBay

With Apple Computer now showing signs that it will fall far short of meeting overall holiday demand for the 4GB iPod nano, consumers eager to obtain the ultra-slim digital music player in time for Christmas have shown a willingness to pay over $350 (or 40-percent above retail).

In an eBay auction that ended just before noon on Wednesday, a brand new 4GB iPod sold for an eye-popping $355 — $106 above its $249 manufacturer suggested retail price. Several similar 4GB iPod nano auctions remained open with bids near and over $300, suggesting they will also close near the $350 range.

The online bidding battle is heating up amongst reports that Apple has told some of its partners and authorized resellers that it cannot guarantee that new or recently filed orders for the 4GB nano will ship in time for Christmas. Similarly, the company has raised lead times on its own online store to 1 to 2 weeks for the 4GB model. The 2GB iPod nano remains available for shipment in 1 to 2 business days.

Consumers looking for a 4GB nano before Christmas will likely have better luck swinging by the closest Apple retail store — outlets the company appears to be favoring, with new shipments arriving throughout the week in some locations.

All but one of a dozen Apple retail stores contacted on Tuesday afternoon said they had stock of both the black and white 2GB nano. Approximately 60-percent of the stores also showed inventory of the 4GB nano in black. However, none of the stores contacted were able to turn up a 4GB nano in white.

Those consumers who are not within driving distance to an Apple retail store may have the toughest time filling gift lists that include a 4GB nano. Major online retailers Amazon.com, Best Buy, Circuit City, and CDW have been sold out of the players for weeks.

Individual Apple Authorized Resellers, not designated as "Specialists," are fairing no better, with Apple's largest US-based channel distributor recently showing backlog (unprocessed orders) of almost 200,000 iPods, including nearly 100,000 nanos.

Optimistically, sources say Apple had hoped to ship between 10 and 12 million iPod nanos this quarter, but recently toned-down its internal forecast amidst component supply issues. Once such obstacle reportedly involved a shortage of a the Cypress chip used in the nano and video iPod's Apple-designed click-wheel.

As a result, Apple has reportedly mended ties with its old click-wheel supplier Synaptics, asking the company to act as a second click-wheel component supplier for nano production beginning December 15th and onward. Although Synaptic would not confirm that it is producing parts for iPods again, sources say the Synaptic's recent ramp orders to manufacturing facilities in Asia are "too large to be from any client other than Apple."

With the necessary measures being put in place to improve production, Apple representatives have begun to tell iPod resellers not to fret, and that they'll be plenty of iPod nanos to go around come January. Unfortunately for those resellers, the big bucks come before Christmas.

Analysts now expect Apple to sell between 9 million and 11.4 million iPods during the three-month period ending December 31st, which would also include sales of fifth-generation video iPods and iPod shuffles.