Bernstein Research analyst Toni Sacconaghi estimated that Apple sold 17.5 million iPods during the fourth quarter of 2006, a 25 per cent increase from last year. He added that it was likely that many of the iPods were sold at lower prices than before.
"We believe the first ever year-on-year decline in iPod revenues may be unexpected for some investors," the analyst wrote in a research note.
Average price down
Sacconaghi estimates that the average sales price dropped by 22 per cent, from $207 (£105) to $161 (£82), in the holiday quarter compared with a year ago.
Wall Street analysts expect overall Apple sales to increase 12 per cent, from $5.8bn to $6.4bn (from £2.9bn to £3.2bn), compared with a year ago, according to Thomson Financial .
Apple is expected to report its net income rose to $682.2bn (£346bn), or 78 cents per share, from $565bn (£286.5bn) a year ago.