JULY 30, 2009 • In a conference call, Nintendo Co. Ltd. attributed softer sales of its DS and DSi handhelds to Apple Inc.’s iPhone and iPod Touch, not Sony Computer Entertainment’s PSP. Nintendo also warned that its fiscal 2010 profit would likely drop for the first time in years as a direct result of competition from Apple’s mobile products.

Impact: It is somewhat surprising that Nintendo would admit to competition from Apple’s mobile products.  However, it could also be that slower sales are due to the market being saturated with DS owners.  The new features of the DSi simply may not have been enough to convince DS owners to upgrade.  Nintendo’s profits in the past few years have been incredible and having them come down from the stratosphere should not be a major surprise.