View Full Version : When would you drop mini iPod to $199?
Okay, you're heading up Apple's iPod division. Production is up and so is demand. Microsoft has launched (beta?) it's music store and Sony has tweaked it's players to playback MP3's.
When or should Apple play it's trump card and lower the prices of it's mini and perhaps even it's big brother iPod? Is it too early? Or will lowering the price put a nail in the coffin (if it isn't halfway in already) :)
Ideally I'd try to figure out when a major competitor (perhaps Sony) is planning to release an iPod mini competitor at $250. Then, the day before it's announced, drop the price to make the competition look bad. Then again, the competition would probably try to release their new player at $200 from the start. Still would be a good idea to drop the price JUST BEFORE the release of a competing product.
DMBand0026
2004-09-27, 20:16
Absolutely. Put a choke hold on Sony or anyone else for that matter before they even get a chance to get on the market. Although I believe that Apple is a step ahead of even us, remember what happened with Sony's latest player and the iPod 4G? I believe the week before Sony's biggest new thing, Apple released the 4G iPod with a $100 US price drop...the iPod is wrecking the Sony in sales, no doubt.
it'll get there soon enough, I still won't want one though.
bassplayinMacFiend
2004-09-27, 20:53
I don't think you'll see a drop in the iPod-mini's price until you can reliably find stock. Any time before this point would be silly and would foolishly cut into margins.
At some point, iPods are going to reach a saturation point. Hopefully Apple doesn't have too much stock when this happens.
kscherer
2004-09-27, 22:46
That saturation point will likely come just as Apple is prepared to release an all-new, super-cool digital device. This will reopen the market and everyone will want one, even those unfortunate enough to have just bought their first iPod.
By the way, price reductions in January at MWSF along with new PowerBooks. Apple will not lower the price going into the Christmas holidays, especially with a long waiting list still in effect. Get production up to maximum, Capitalize while you can, lower manufacturing costs in the process, lower prices after the big holiday rush.
Every other manufacturer (including Sony) will see it coming but will not be able to keep pace.
Messiahtosh
2004-10-01, 17:40
From macminute
Apple to introduce flash-based music player?
October 1 - 16:11 EDT** Citing "numerous sources in Asia," Thomas Weisel analyst Jason Pflaum said today that Apple will use controller chips from semiconductor company SigmaTel for a new player it's planning to launch before the holidays. But unlike Apple's iPod and iPod mini, the new player will reportedly use solid-state flash memory, which offers less capacity but provides the company an opportunity to create a device smaller and lighter than the current iPod models. No other details were provided.
www.macminute.com
Purgatos
2004-10-01, 20:11
Ugh, I don't know how people can even use flash based players. They just can't hold enough music for them to be of any use to me.
I know I wouldn't buy one even it was from Apple.
Actually, IIRC micordrives(compact flash) are up to 4 gigabytes, so it would make sense if it improves battery life(among other things) to use those instead of a HDD in the Mini.
Of course, these retail at $499, so it might be a little out there for an iPod Mini.
Uh, CubeDude, the iPod mini uses a 4 GB microdrive. Those use the compact flash form factor, but they are actually tiny hard drives (1" vs. 1.8" in the normal iPod vs. 2.5" in most portable hard drive players and notebooks). The largest solid-state flash memory available for a reasonable price is 2 GB I think. But it requires far less power to use, it's less prone to failure, it's lighter, and it can't skip.
Maybe once the 1" CF-like microdrives get higher capacities, and solid-state CF cards go up to 4 GB or so for a reasonable price, then you might see an iPod based on solid state memory. Still, you can't rule out a 2 GB iPod mini for $199. It would get really good battery life.
BarracksSi
2004-10-01, 23:32
Ugh, I don't know how people can even use flash based players. They just can't hold enough music for them to be of any use to me.
I know I wouldn't buy one even it was from Apple.
I'd love to have one from Apple because I'm paranoid about shaking the HD inside my 3G iPod. I just can't see how jogging isn't hard on what's essentially a glorified record player mechanism.
I'd load it up with a few dozen songs & stuff that I like using for workouts (metal, especially) and running (Marine running cadences would be good), and let the regular iPod take care of my other mobile music & data backup needs.
If Apple can squeeze a top notch iPod-quality interface onto a flash-based player, and give a good memory size for a good price, they'll do very well.
Nullpunkt
2004-10-03, 11:01
my guess is that as long as they can maintain their current market share, that they'll keep the price fixed until the novelty of these things starts trailing off. Then, and only then, will a significant price drop be in store for them. (I say that, as I'm sure minute price drops and other deals will surface)
This speculation about price drops assumes that the margin on the Mini is good enough to do so. I doubt Apple could drop the price too much at the present time. Look at other players comparable to the 20GB iPod. They're all about the same price. That's because there's no money in selling them for less.
When the 4G iPod was introduced, the price didn't really drop. The two lower end models were upgraded, and accessories were removed from the package so the margins probably remained the same. The high end model was discontinued to make everything appear as though there was a price drop. Marketing; you gotta love it. :D
Messiahtosh
2004-10-05, 09:35
Apple makes about 50 dollars per iPod mini sold, and almost 70 per regular iPod. An iPod micro might give them 20 dollars or so, but it'd be worth it, because the amount of sold micros would be insane, and it would bolster market share of both the iPod and the Mac.
nguyenhm16
2004-10-05, 22:14
I'd love to have one from Apple because I'm paranoid about shaking the HD inside my 3G iPod. I just can't see how jogging isn't hard on what's essentially a glorified record player mechanism.
I bought a 30GB 3G iPod when it first came out in May 2003, and I run with it about 5 times a week (usually 5-6 miles per). Still works fine, though of course it will occaisionally skip songs if I hit the FF, and about 1 in 6 times I hook it up to the computer to sync songs it runs the (agonizingly long) disk scan. That worried me at first, but like I said I've run with it for almost a year and a half with seemingly no permanent effects.
Before that I had an original 5G iPod that I bought when it first came out (it was acutally what convinced me to switch back to Macs) that also saw continuous use when running, and my friend still uses (though not for running) to this day.
Profit = marketshare * margins. What they want to do is to maximize profit. There's the question of what timeframe they are maximizing the profit over. Considering only the iPod division, the right thing to do would be to cut margins and concentrate on marketshare now, so the network effect between iTMS and iPods brings them more marketshare and more profits in the long run.
Actually I'd like them to keep iPods just at "competetive" pricing, and push close-to-zero margin Macs instead.
Profit = marketshare * margins. What they want to do is to maximize profit. There's the question of what timeframe they are maximizing the profit over. Considering only the iPod division, the right thing to do would be to cut margins and concentrate on marketshare now, so the network effect between iTMS and iPods brings them more marketshare and more profits in the long run.
Actually I'd like them to keep iPods just at "competetive" pricing, and push close-to-zero margin Macs instead.
That's if they have enough stock available to leverage less profit for more unit sales. It may be possible with the iPod, but I'm not sure about the mini. Are those still in really tight supplies?
That's if they have enough stock available to leverage less profit for more unit sales. It may be possible with the iPod, but I'm not sure about the mini. Are those still in really tight supplies?Adjusting price to stock is just short term tactics, the important thing is long term strategy which my last post was about.
Anyway, I took a quick look. The word on the web is that Hitachi has been ramping up HD production at a steady rate. iPod mini is just a small HD really. I believe Apple can drop prices anytime they see fit, and they still have some margin left at $200.
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