Steve Jobs is known as a master of many things, from spotting technology trends to managing innovation to advertising to giving keynote speeches. Now, it may be time to make room for another skill on that list: managing product mix.

Since reporting a story that ran last night about likely iPod shortages this holiday season, it's becoming clearer to me that Apple has likely set itself up for good things no matter how many NAND flash chips it gets its paws on.

The big reason is that the video iPod may be turning out to be a bigger hit than many people expected. One Wall Street source I spoke with says there's talk that Apple might sell as many as 4.5 million video iPods this quarter. That's more than twice the conventional wisdom of a week or so ago. That's a credit not only to excellent supply chain management, but also to great product line segmentation. My sources say that many U.S. shoppers are opting to pay up for a video iPod when they can't find a 4-gigabyte nano at their local retailer. It seems many shoppers think two gigabytes just isn't enough capacity. So faced with the prospect of going home with nothing, they're paying the premium.

Personally, I don't think the unit's video capability has that much to do with it. In fact, I think Jobs' stated design goals for the product were right on the mark: make a great music player, and throw in video as an added feature rather than charge extra, as it did with the defunct iPod photo. The result is a product that is smaller (not "mini"-like, but closer) but has all those extra capabilties--for just $50 or $150 more than that 4 gig nano, depending on which vPod you go for.

Speaking of nanos, some Wall St. analysts think Apple might have a trick up it sleeve on the supply side there, as well. It won't be enough to satisfy all shoppers, but might help the company avoid disappointing Wall Street. One source points out that while Apple won't start getting flash via some of its newly-announced partnerships until next year, that it is already getting some deliveries from Hynix. Given that Korean giant is one of the largest flash supplier in the world, that could make a big difference, depending on how quickly it ramps up shipments.

And Citigroup analyst Richard Gardner says that even as of September, his research showed that Apple had secured enough flash from Toshiba and Samsung to ship ten million iPods through the end of the year. Based on its September quarter sales, he figures Apple should be able to deliver at least eight or nine million in the December quarter. Once you back out sales of the iPod shuffle, that leaves seven or eight million nanos. That compares to just five million estimated by others, such as Piper Jaffrey's Gene Munster and American Technology Research's Shaw Wu. Wu, for example, still doubts Apple will be able to make more than six million nanos.

Apple may also have another card it can play, however. If it does find itself constrained by a lack of flash chips, it could maximize unit shipments by shifting production towards the 2-gigabyte models and away from the 4-gig models (which use two 2-gig flash device). That may seem to fly in the face of the fact that the 4-gig products are what most people are hankering for. But the closer we get to Christmas, the hotter demand for those 2-gig nanos will get. Why? Basic shopping economics. Say it's December 20. You're running out of shopping days, and local stores have run out of 4-gig nanos. I don't know about you, but I'm going to buy the nearest 2-gig nano I can find for that iPod lover in my life. I save $50--and are they really going to hold it against me? Doubtful.

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