According to an analyst the price cuts in the iPod Shuffle are likely to increase sales across all iPods. This decision by Apple to cut iPod Shuffle prices may help Apple meet shipment forecasts for all iPod models. Shaw Wu, American Technology Research analyst says that this was a development that very positive and due to the low December quarter sale output, this was perhaps needed and in the light of this price cut Apple would reach it’s forecasted sales.

According to Shaw Wu, Apple is a stock to buy. The price target he puts on it is $175 per share. He felt that the right thing for Apple to do would have been to reduce prices in the December quarter. This would have driven incremental demand as newbies to the iPod hooked on to the world of the iPod.

Wu believes that the Shuffles at a reduced price would lead to incremental sales of between a half million and one million units per quarter. These would then bring pressure on the competitors. As a conclusion near term trends seem difficult for Apple as with most companies with the recession looming. In addition there has also been a consumer spending slowdown. However, Wu believes that Apple being a fundamentally strong company can weather the storm.