Friday, January 05, 2007

iTunes sales per ipod has been consistent at 2-4 songs per month with a slight downward trend. iPod users aren't buying more songs, there are just more iPod users over time.

There's an even more important question - what's the buying pattern of an ipod user? Do they buy a lot at first and then stop, or do they keep on buying over time? Until recently, it's been hard to tell. With iPod sales growing 3x year over year, at any given time most iPod owners are new owners who would be buying in either case. This year, that's changed. iPod sales are growing MUCH more slowly year over year, and more of the buyers are replacing exiting ipods, so the proportion of users who are new is much lower. If the installed base is sustaining their buying, then you should see continued sales growth. If users stop buying after the first months, then sales should drop.

That's exactly what the Forrester data showed.

After last holiday:

- iPod sales hit a wall. Now they begin to grow at "only" 1.3x per year.

- Suddenly the influx of new users (buying 30 songs per quarter) can’t keep up with the dropoff in sales from the IB

- ITunes sales level off or even drop a bit.

By the way; nobody should be very surprised; Apple suddenly stopped announcing momentum on itunes in February...hmmm.....