A CHRISTMAS CRUNCH FOR iPOD LOVERS.

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Author: Burrows, PeterBeucke, Dan

APPLE WATCH

DEMAND FOR APPLE'S iPOD will be huge again this holiday season, no question. The only issue is supply -- and how much revenue Apple will forgo because of shortages that look unavoidable. Circuit City Stores says it expects shortages, and two smaller retailers say they're getting less than half of what they order each week. With demand expected to surge -- analysts figure Apple could sell upwards of 10 million iPods in the final quarter -- last-minute shoppers could be left with empty stockings.

Of most concern is the iPod Nano, which stores songs on scarce flash memory. On Oct. 11, Chief Operating Officer Tim Cook told analysts: "The demand for this product is staggering. At this point I can't project when supply will meet demand." So far, Apple is doing a better job of balancing supply and demand for itself than it is for its partners. While many stores don't have the hottest products, such as the black 4-gigabyte Nano, Apple is shipping all models within 24 hours from its online store. "It's frustrating at times" to work with Apple, says Charlie Tebele, president of retailer RCS Experience. "But as a businessman, I can only admire what they're able to get away with."

Copyright The McGraw-Hill Companies, Copyright 2005

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By Peter Burrows

Edited By Dan Beucke