iPod pulls down Apple Shares

Friday saw Apple shares falling $ 1.80 to $ 38.24 after reports that sales of its iPod digital music player seems to be slowing, and is not expected to turn over in next few months.

Citing unnamed sources, the AppleInsider report said iPod shipments appeared flat or declining and that most iPod and Mac models were seemingly overstocked. Apple did not return calls Friday seeking comment.

But some stock analysts said that while they have seen a slight slowdown in iPod sales, shipments remain strong and that Friday’s sell-off was overblown.

"I don’t see anything very substantial," Argus Research analyst Wendy Abramowitz said about concerns that unsold iPods were stacking up.

"We don’t comment on rumors and speculation," Apple spokesman Steve Dowling responded.

The iPod has seen increased competition from rival digital music players in recent months as well as the emergence of hand-held devices that perform multiple tasks, such as store photos, receive e-mail and play digital music files.

The iPod--the dominant MP3 player--has helped shape the entire digital-music market, and it has transformed Apple from a boutique computer outfit into a hot consumer brand.

Schaumburg-based Motorola Inc. has been touting an Apple link for a coming line of mobile phones that play music. The phones will have the ability--like the iPod--to download music from Apple’s iTunes Internet music store.

Motorola was set to unveil the first iTunes phone this spring, though the company suddenly changed plans, apparently due to wrangling with Apple and/or wireless phone carriers.

The phone is expected to be unveiled this summer.