Apple's iTunes slowdown "exaggerated"

Written by Brett Thomas

December 14, 2006 | 17:48

Tags: #forrester #itunes

Companies: #apple

It wasn't all that long ago that analysts over at Forrester were shouting doom and gloom over Apple's iTunes Music Store. The company released a report which covered the first half of 2006, saying that iTunes sales had slowed sharply - 65%, in fact. Now, Forrester might have to eat its words...a new study shows that sales were actually a lot higher than previous years.

The second study was done by analysts over at ComScore, a firm that specializes in IT studies. According to the report, Apple's store actually had a sales increase of 84% in the first three months of 2006 over the same period in 2005. It also saw an 80% increase in unique visitors. Such a trend goes a long way towards illustrating the strength of Apple's iPod players, which is where most of the company's profits come from.

Forrester has stood by its initial report, though it doesn't dispute that the ComScore report is accurate. The company has attempted to defend its figures by saying they were "seasonally adjusted." However, even with years of business school and a focus in accounting, I can't really tell you how one can seasonally adjust a 149% discrepancy.

Apple stated at the time that the Forrester report was 'simply incorrect', and that the store actually did more business than before. Of course, this type of tit-for-tat usually doesn't go in favour of the company, and this particular instance was no different. Apple's words went unheeded, and the company's stock dropped 3% in a mild Wall Street panic attack.

The controversy may not be all bad for Apple, however. As in the old adage "Any press is good press," it is expected that all of the hullibaloo will probably attract a few new people to find out what all the fuss is about. Perhaps if sales are good enough, Jobs won't feel the need to sue for the beating his company received from the markets.

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