Thu, Feb 17, 2005 page10

• iPod Shuffle hits Taiwan's 7-11 stores

  RED-HOT The new model Apple digital music player, the iPod Shuffle, was launched yesterday and is selling fast at 7-11 stores in a promotion team-up between the firms

  • By Amber Chung / STAFF REPORTER
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  The nation's iPod fans now have an easier way to bring home an iPod Shuffle, as Apple's Taiwan branch has teamed up with the 7-Eleven convenience store giant to market the red-hot gadget, which was officially launched yesterday.

  "We had hundreds of inquiry calls yesterday alone, as soon as we started selling the product in our outlets," said Vivian Hsu (徐崇蘭), public relations specialist with President Chain Store Corp (統一超商), that runs over 3,700 7-Eleven stores across the nation.

  The retailer expects the first batch of 500 units of the iPod Shuffle, the new model of Apple Computer Inc's best-selling iPod music player family, allocated for sale in 250 outlets in the nation's metropolitan areas to be sold out in two or three days, she said.

  This is the second promotional partnership between the information technology and retail giants after the two parties received enthusiastic feedback from consumers during a promotion of the iPod Mini last August.

  The retailer said it would seek to continue the sale but were uncertain about the quantity available for the next wave, given a shortage of supplies of the popular consumer electronics gadget after it hit the market.

  The pint-size, flash memory-based digital music players, which can hold 120 songs or 240 songs, depending on a storage capability of 512 megabytes or 1 gigabyte, are priced at NT$3,600 and NT$5,400, respectively.

  In a bid to downplay the shortage, Apple said it had seen stronger demand than supply globally after the rollout last month and it's difficult to predict when the tight supply will stabilize, according to an official at an Apple Taiwan branch who spoke on condition of anonymity.

  Sales of Apple's sleekly designed iPod music player had boomed to over 10 million units at year-end, since its launch in 2001. Its great popularity has in turn benefited the company's Taiwanese assemblers and component suppliers, including Inventec Appliances Corp (英華達) and Asustek Computers Inc (華碩電腦), that make iPod and iPod Shuffle, respectively.

  "The shipment of iPod Shuffles is estimated to contribute to 5 percent of Asustek's revenue for last month [of around NT$26.2 billion]," said Jenny Lai (賴惠娟), an analyst at JP Morgan Chase Bank Taiwan.

  Asustek is expected to ship 5 million units with a minimum margin of 5 percent, which may make up 4 percent of the company's annual sales this year, Lai said.

  In light of sales of the product heating up, the shipment estimates may need upward adjustments, she said.

  Another market watcher suggested that investors can set their sights on Apple's upstream component suppliers, who enjoy much better margins than the downstream assemblers.

  For instance, Acon Advanced-Connectek Inc (連展科技), which supplies portable batteries for iPod music players could enjoy margins as high as 60 percent, said Stevie Chou (周奇賢), vice president of the research division of SinoPac Securities Corp (建華證券).

  Apple reportedly may increase its purchases from Taiwan suppliers this year by a quarter to $5 billion as it boosts sales, according to a Chinese-language newspaper report.

  Acon shares closed up 3.05 percent at NT$16.9 while Asustek closed marginally down 0.56 percent at NT$88.5 on the TAIEX yesterday.
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