So imagine the tempest stirred when Forrester Research analyst Josh Bernoff released a report saying -- Heaven forbid -- that sales of music on the Apple iTunes website were slowing. And not just a little, but by a staggering 58%!!
The background, of course, is that digital music transformed Apple into the entertainment and computer powerhouse it is today. iPod and iTunes together account for more revenue to Apple than the computer business that put the company on the map in the first place. Yet music is so incredibly good for Apple, that the halo effect from these devices has had a huge influence on Apple's computer sales.
So any news to the contrary on the popularity or success of the iPod and iTunes products is typically met with swift scorn by the Mac faithful. We in the business call it "getting flamed." Suggest iPod sales are slowing, or iTunes sales are slowing, or that there is any tarnish to the Apple luster, and you're met with a torrent of blog postings about your incompetence; emails about what a loser you are; and in the extreme cases, actual voicemails!
So imagine what poor Josh Bernoff is dealing with this week: Josh is insightful, helpful, and always ready with good comments and analysis on interesting stories. I have spoken to him many times.
In a report that seemed to gain momentum this week, even though it came out the week prior, he suggests that sales from Apple's iTunes online store are, well, slowing. But not plunging.
He writes that shoppers who buy an iPod only buy, on average, 20 songs from iTunes. That number swelled to 23 recently. And these numbers come from Apple itself.
Bernoff concludes, based on Apple's own data, that "new" iPod sales were slowing because consumers were merely trading up. That Apple wasn't expanding the iPod sales pie. And that consumers may be "tired" of the iTunes site with sales slowing because of it.
"This accounts for a little tarnish on the incredible iTunes success story," Bernoff writes.
But everyone in the media seized on his 58% figure. Dire predictions of gloomy days ahead torpedoed Apple share which had been up around 50% over the past six months.