iPad not cannibalizing iPod sales, says analyst

Real stretch to say that April's numbers show iPad eating into iPod Touch sales

Apple's Mac sales jumped 39% in April over the same month a year ago, while iPod sales were down 17%, a retail research analyst said today.

But it's too early to conclude that those numbers show Apple's new iPad is eating into iPod sales, said Stephen Baker of the NPD Group. "I think it's a real stretch to start saying that things were cannibalized [by the iPad]," he said.

The jump in Mac sales has a simple answer, Baker added. "It was the first month of the new MacBook Pro," he said. "Apple traditionally sees a sales jump in volume after new models are released."

Apple refreshed its MacBook Pro notebook line on April 13, giving the laptops faster CPUs, more powerful graphics processors and longer-life batteries. The company also lowered the price of one 15-in. model by $100, and dropped the price of the 17-in. MacBook Pro by $200. However, Apple raised the price of the least-expensive 15-in. MacBook Pro by $100.

At the time, Ezra Gottheil, an analyst with Technology Business Research, called the move a "rebalancing" of the line's prices and features.

Baker also noted that April's 39% year-over-year increase came easy for Apple, since 2009's numbers were miserable in comparison to both this year and 2008. In the first three months of 2009, Apple sold 2.2 million Macs, 3% fewer than the same quarter in 2008 , the first time in six years that Mac unit sales had declined year-over-year.

Mac sales rebounded somewhat during the April-June quarter of 2009 to 2.6 million units.

Wall Street analyst Gene Munster of Piper Jaffray interpreted NPD's April sales estimates differently. In a research note to clients, Munster said the data hinted that Apple's new iPad tablet had had "minimal" impact on Mac sales but may be "slightly cannibalizing iPod sales." According to NPD, iPod sales in April were off 17% from the year before.

Baker wasn't so sure. "It's tough to read into just one month of sales. Apple [sales] do have spikes," he said.

But if the iPad were to steal sales from other Apple products, it would be the iPod Touch, the closest thing in Apple's line to the iPad in functionality. "There's only one point of [possible] cannibalization," said Baker, talking about the iPod Touch. "But that's been growing rapidly in terms of unit sales."

In fact, Apple has gone out of its way during the last several quarterly earnings calls with analysts to tout the success of the iPod Touch. Last month, for example, Peter Oppenheimer, Apple's chief financial officer, said that iPod Touch sales were up 63% in 2010's first calendar quarter compared to the same period last year.

"There was nothing obvious in the iPod number or the Mac number to suggest cannibalization [by the iPad]," Chief Operating Officer Tim Cook added during the April earnings call.

"Apple has multiple businesses now," said NPD's Baker today. "And they manage them differently. The Mac [business] remains a revenue and a dollar driver, but it's not a unit driver. If you want to sell ten million of something, it has to be phones or iPods."

The iPad may fit in that mass-market category at some point, Baker concluded, but not until Apple can drive down its cost for the tablet and pass on those savings to customers with price cuts.

Apple won't release Mac sales data for the current quarter until July.

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Gregg Keizer

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