Gone in 60 nanoseconds: iPods are hard to find

Third-party retailers can't stock Apple products fast enough for buyers.

By JOYZELLE DAVIS

Scripps Howard

DENVER — There are shopping mall crowds, and then there was the crowd at an Apple Store.

After all, it's about the last place in town that still has the iPod nano portable music player on its shelves.

"It's insane. I hope they still have the nano in stock by the time I get to the front of this line," said Kara Bowler, who had already tried Best Buy, Ultimate Electronics and CompUSA before heading to Apple.

Apple in September introduced its pencil-thin nano music player, a 4-gigabyte flash memory player capable of holding 1,000 songs. The $249 nano is the latest addition to Apple's iPod line, which has churned out a must-have product every year since 2001, reviving the fortunes of a company that was hardly on anyone's shopping list five years ago.

The nano isn't the only iPod product in short supply. The 1-gigabyte iPod shuffle, which holds 240 songs, is out of stock nationwide until mid-January, according to Apple's Web site, and third-party retailers such as Circuit City also report spot shortages of the video iPod.

Hot commodities

More people plan to buy an iPod or an accessory this holiday than they do a cell phone, according to a survey by Morgan Stanley. Apple's iPods have more than 70 percent of the music player market, though that's expected to keep growing because only 8 percent of U.S. households own an iPod, Morgan Stanley said. (Wall Street likes Apple, too. The company's stock price has more than doubled since mid-June.)

A nearby Best Buy store had been out of stock of the 4-gigabyte nano since around Thanksgiving, a salesman said. The only iPods the store has in stock are the 512-megabyte shuffle and a 60-gigabyte video iPod. Ultimate Electronics reports the same for all its metro-area stores.

The story is largely the same online, with Best Buy, CompUSA and Circuit City all sold out of the black nanos. Even Apple's online store has a two-week shipping time for the 4-GB model.

Apple store

Even the Apple store sometimes runs low. The bins for the 4-GB nanos were temporarily cleared out by midday Wednesday, though another shipment arrived later. Customers who called asking about the store's nano stock were told they'd better come in right away.

The steady restocking at Apple stores has led to speculation that the company is diverting iPod shipments away from third-party retailers such as Best Buy in a bid to cut out a retail middleman, giving Apple more profits and encouraging customers to browse Apple's other products and accessories.

Over the Thanksgiving weekend, Piper Jaffray Co. analyst Gene Munster checked on the availability of iPods at 11 Comp USA, Circuit City and Best Buy stores and also at 10 Apple Stores. All 11 of the non-Apple retailers were sold out of at least one color or configuration of either the iPod nano or video iPod.

In contrast, eight of the Apple Stores had all iPod models in stock, Munster said in his report, leading him to the conclusion that Apple is hoarding its own inventory.

Cupertino, Calif.-based Apple didn't return a call and e-mail request for comment.

The nano isn't the only must-have gift this holiday season. The Microsoft Xbox 360 game console disappeared from store shelves immediately after it went on sale just before Thanksgiving. Even Microsoft Chief Executive Steve Ballmer has reportedly said he couldn't get one.