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iTunes sales going down… or up?

December 15, 2006

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A recent iTunes Store sales analysis by Forrester Research is now drawing more scrutiny.

Apple immediately questioned the report, which declared that monthly sales levels had dipped 65 percent during the first half of this year. An Apple spokesperson called the figures “simply incorrect,” though the company did not offer its own sales data to counter the finding.

Others are now piling on. “Contrary to recent reports suggesting sales on iTunes are declining rapidly, our analysis of Apple company data … shows strong growth (year over year),” Piper Jaffray analyst Gene Munster wrote Wednesday.

A closer looks reveals that different data sets are being analyzed. Year-over-year paid download sales are increasing, and Nielsen Soundscan data suggests an increase of about 75 percent. But Forrester was actually examining sales shifts within the year, specifically the slide from January to June. “The 65 percent decline in revenue was between January 2006 and June 2006,” explained Forrester researcher Remy Fiorentino.

Meanwhile, lead analyst Josh Bernoff attempted to cool the flames and clarify the matter, especially following a dip in Apple earnings and endless phone calls. “Now for the record, iTunes sales are not collapsing,” Bernoff blogged. “Our credit card transaction data shows a real drop between the January post-holiday peak and the rest of the year, but with the number of transactions we counted it’s simply not possible to draw this conclusion.”

The Forrester report relied on a sampling of iTunes credit and debit card transactions, not Apple-supplied data.

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