Accessories Roundtable- Putting Top Priority on Secondary Goods
[Retailers] are asking for anything related to iPod—chargers, ear buds. A lot of them are asking us to give them iPod ear buds that are better than the quality of the ones they are getting when they buy the iPod. Another category that's going through the roof is noise cancellation, we've introduced our second pair of noise cancellation headphones and that has been a big boost in our sales.
Scott Popovich: CD media has tended to flatten out in terms of unit sales. The industry is projecting about 100 percent growth and so far we're seeing that in the first few months of the year (DVD+ and DVD- and DVD-RAM has an extremely small percentage—one to three percent share). DVD media is still promoted quite frequently. It's a building basket. Retailers can tell you when the customer buys DVD media they also buy four or five other items. It still is one of the categories that drives traffic and margin.
The other category that is incredibly hot is USB flash drive. This is a really interesting category. It's growing by 100 to 150 percent year-over-year in terms of units. It seems to work in the mass channel as well as the specialty channel; all channels are embracing it. People are saying, "Look, this is the replacement to the floppy disk." There are actually schools that require students to have USB flash drives (university and K through 12).