Slashdot Mirror
Why iPod Mini is a smart move for Apple
Ample Dave writes "Ars Technica has an analytical article up right now that looks at Apple's strategy with the (many would say overpriced) iPod Mini. I have to admit that I bought into the rumors of a dirt cheap iPod Jr., and thus was very disappointed when the real price of $250 was announced, but this article changed my mind. It leads me to wonder about Apple's other pricing games. You an see this kind of thing with the eMac and iMac, too."
Way too little for way too much cash.
you've just been upsold by $50
Thats like digital cameras these days.
Only $250! But the CompactFlash is so small as to be stupid. And you'll need a case. And some rechargeable batteries. And an AC adapter. And a docking station. And...
After its all over, you just spent $500 on something that costs $225.
I guess thats the new Bait and switch? Or can you come up with a better name for it? (upselling?)
In the future, I would want to not be isolated from my friends in the Space Station.
"But does it have OGG?" (Answer: No, and it never will.)
First of all, price point comparisons between other MP3 players doesn't really do the iPod any justice. It is over-priced for what you're given yes; but you're paying a premium for ease-of-use, style and of course the brand name. It's an Apple product, designed to work with other Apple products, and I'm sure that it works quite well. I own a 128 Muvo and that's all I need for an Mp3 player really. It's dual-function (128 Mb USB key acts as a USB drive as well), it's copy and paste in Windows for Mp3s and files (no need to install any extra software or drivers like some minidisc players I know of) and it's pretty sturdy. Granted, I got it for free so it's a bit better deal then a 4GB HD for $250 but hey, to each his own.
Secondly, maybe the Apple marketing team thought that a $50 difference was all that was really stopping them from taking hold of the lower market share. I also think that once people start buying more of the iPod minis, it will force Apple to bring down the price of the iPod Majors. I've yet to find 15Gb of music to fill up my player with, legal and quasi-legal. It really is a mind-game. $50 may put some people above what they wanted to spend on a player. If it stops 1000 people from buying other players, Apple just made $250,000 instead of $0.
"Anybody who tells me I can't use a program because it's not open source, go suck on rms. I'm not interested." (LT 2004)
Did you bother to read the article? The whole point is that the device is not expensive at all when compared to what else you can get in the smaller storage capacity market for that price.
At the very least, it's competatively priced, and given the iTunes support and the superior UI, it's probably a no-brainer for anyone looking in that general price range.
I guess my question would be "why do you need those things"?
For my iPod (30 GB, if you're curious), I got a dock but never use it. I just plug it into the cord every so often to sync up my audio books or some such.
So for most of the items, I'd say they are truly "extras". Don't get me wrong - I personally think the mini-iPod should be $199, but after reading the Ars article as well with that handy little table I'm leaning more towards the "Probably *is* worth the cost".
Either way, I'll hope for a price drop, mainly because I want to get my wife one for our Anniversary.
52 Weeks, 52 Religions with John Hummel
is that is positioned to sell as many as they can to people that will pay $249 for them. When those people run out they can drop the price to $199 and maybe even introduce a 2G at $149. And sell a shit load more.
The difference between Canada and the USA is that in Canada healthcare is a right and gun ownership is a privilege.
Oh, please. Not every man is design impaired, and color and styling may be among the criteria evaluated in a purchase. When you buy a car, or clothes or whatever do you completely eschew color and design? I doubt it. While the very few will take function completely over form most of us enjoy having something that is aesthecially pleasing besides being of great functional value.
Am I to assume from the tone of your post that if you were to be able to have a girlfriend/boyfriend you would completely ignore looks? :-)
http://www.rootstrikers.org/
The fact that Apple's product is too expensive isn't excused by the fact that all its competitors are too expensive too.
"'I pass the test,' she said. 'I will diminish, and go into the West, and remain Galadriel.'"
- JRR Tolkien.
One of the things I think most people don't consider is that most of the naysayers who point out the $50 difference between iPods are Slashdot/Apple types; people familiar with the tech industry, and most offerings by most major companies.
But consider the average Joe wandering around his local shop, who doesn't know much of about technology, and just knows that he wants a player that can hold lots of music, and isn't particularly large.
He is going to see many tiny music players, all with the ability to play the mp3's he downloads from Kazaa.
Being able to compare a 512MB player, and a 4GB player for the same price won't leave much decision making to be done.
Now me personally, I bought a 15GB iPod recently, because I feel $50 more is a pretty good investment for 11GB. But many people don't understand what a "gigabyte" or "megabyte" are. They see Apple's ad for "1,000 songs!", and think "Hmm, that's a lot of songs."
Vonal Declosion
i think people assume the insides are held together with scotch tape or just thrown in their without any thought. mention of "not being able to run with iPods", based on friends experience, should be modded troll.
NetInfo connection failed for server 127.0.0.1/local
If Apple keeps selling iPods at a healthy rate, there will soon be more iPod users than Mac OS X users.
Today, the bulk of new iPod customers run Windows, not Mac OS X.
With the iPod mini opening up iPod sales to more buyers, the balance towards Windows will shift even more. There is no fighting "the great multiplier".
As most Windows users don't seem to be all that fond of Apple's "medical computing" white motif, making iPods in different colors was simply a "must do" business decision.
Very soon now we will see a fundamental shift at Apple. Numerically, they will have more Microsoft Windows customers than Mac customers. Apple will then have to decide what to do with them. Most of them will be early adopters, buying the iPod/mini because it is the established portable music player.
Apple will have to make the choice of whether to port their music/media software to Windows or will face losing most of those customers... who do not want to switch platforms (at a very high cost) just because of a music player.
When there are many "good" music players available in a year or two, these customers will be making the decision to get a new iPod or one of the many newer/cheaper/just-as-good winPods (which will work with many music stores, not just one).
All in all, the digital music market promises to be full of interesting developments over the next 1-2 years as companies jockey for position. Unless Apple opens up their products, ports their products and makes them cheaper, I would think their chances of being the ultimate winner are low. My bet is that most people will not switch computing platforms over a music player.
Without answering the battery/moving parts problem, it then says "However, if your budget is keeping you from snapping up a larger player, or you do not have much of a digital music library to speak of, then a smaller-capacity hard drive player like the MuVo2 or iPod Mini is a better deal than a flash player." But it doesn't explain why. Batteries would be cheaper in a flash player. If you don't have a big library, small capacity flash players are cheaper than the iPod Mini. How is it a better deal?
I'd still rather pay $50 more for a 15GB iPod
Could you people just put on your marketing hat for a few seconds?
Joe and Jane Consumer do not have more than a few gigs of MP3s, at most. Once you hit a certain point, they aren't looking at the capacity anymore - they are looking at style and price. With the mini-iPod, they are saving $50 and getting better style.
Style = Smaller (until things become choking hazzards)
Life is the leading cause of death in America.
There is one lesson Apple seems not to learn: people want much and they want it cheaply. Nobody cares about quality.
If that were true, every computer would be an eMachine, every car would be a Kia, and every DVD player would be an Apex.
But no, people buy Alienware computes, cars from BMW, Lexus, Mercedes, Audi, ect, and hi end DVD players from Denon, ect.
Apple is not the only company that concentrates on selling a smaller number of items to people who want quality, and they are not the only company that is good at it.
I have blog like everyone else
I think a lot of people would rather pay $50 more. That doesn't hurt apple at all--in fact, I imagine it is part of the plan. Consider that you are looking at players in the range of $250 and considering the rio, iRiver, ipod mini or one of the many others. Then you have an epiphany and realize the $50 more gets you a 15MB ipod and you go for it. What apple has just done is convinced you not only to buy from it rather than it's competition, but to buy it's more expensive model. Apple changes the environment from 'which brand should I buy' to 'which apple product should I buy'. I think it is very smart. Those extra $50 start adding up pretty quickly even if the minis aren't selling particularly well and the competition--well they've got trouble.
This is exactly what I thought when I saw Jobs give the keynote. It's only $50 more for another 11 GB in the low end full size iPod. What a rip off.
Then I looked at the size of the mini. It's smaller than a Sony Ericsson T610 phone. "Way too little" *is* what costs more cash in tech. The 1.8" Toshiba drives in a normal iPod aren't exactly going to be cheap. The iPod mini is using a 4 GB 1" *microdrive*. Yet it's not much more expensive than comparable flash memory players.
I think expectations were raised far too high by rumours before the keynote of $99 2 GB iPods. In the UK, we're seeing it priced at 199 pounds "subject to change." I reckon it'll come down in price a bit fairly soon anyway, maybe to $200. Then people might realise what a good deal it really is.
You can still only (in a normal market) lower your price... So Apple has also given themselves room to add new models at this opening price, while lowering the price on the 'older' models to compete further down the offering--further increasing their market share. One thing that will allow them to do this is increased volume and production improvements. They will be able to lower their own costs as they sell more Minis, thereby opening a place for a lower priced model.
/.--Apple is a hardware company. iTMS is a mechanism for selling iPods. I think this was a very shrewd move. I should think in time for the next Christmas season we'll see a new Mini and the current ones selling for $50 less, cutting further into that flash market share.
Had they started selling the iPod Mini for say $149.99 US, they would not have been able to lower their price without hitting their margins. And--as people remind us regularly on
When the next Minis come out, maybe I'll get a first generation one at the reduced price.... until then, I'll probably upgrade my original iPod (5G) to one of the large ones. But that's because I use my iPod as a way to carry a large percentage of my music Library. My runner friends are already converting to Minis.
And it is cute...
You Wintards are always wanting bigger/faster/more.
How about "better"? How about being willing to pay for it?
For once, the best product is also the most popular product. Suck on that.
They'd sell a zillion but then loose a zillion dollars because it's not profitable.
What exactly do you mean by : Apple will have to make the choice of whether to port their music/media software to Windows... Apple has done this already unless you mean something else. You use the same music software with your ipod with your mac that you use with your pc.
To a great many people, 4GB (if they even understand the concept of a gigabyte, some people actually don't bother themselves with such things!) is a number sufficiently high that a higher number is needless. For someone that isn't going to fill 4GB, buying a 15GB player is spending money on features they don't need/want.
However, for many of these same people, small form factor is desirable, as are colors.
It's funny how many geeks don't get that not every potential iPod customer thinks in terms of data storage.
You will always find the other MP3 players at less than MSRP and you will never be able to purchase the iPod at anything other than MSRP. Barring farfegnugen freebies, of course. iPod minis are purely fashionable.
as soon as I read "I disagree" I knew ther was a personal anticdote coming.
ever heard of a bell curve?
well, there are points on either end where the extremes exist....MOST people fall into the center area....you and your friends are EXTREMES....when will people learn that their personal life is not representative of the world!!! talk about egocentric
I am the Alpha and the Omega-3
The ipod mini is a worst of both worlds solution, its a shitty hard drive player, not a good flash player. People buy flash players to excercise with or when they need really high battery life, otherwise there is really no reason to have on as they cost more and do less. With the ipod mini you get NEITHER of those advantadges, but you still get to pay for them. Saying its designed to compete with flash players is classic corporate double-speak.
The price comparison would be best described as bad faith. Where are the cheap HD players on that list? The Dell player (224$ - 269$)? Oh thats right, the ipod only looks like a good deal when you compare the ipod to small units which are flash based.
Religion is a gateway psychosis. -- Dave Foley
What you (and others) are describing may be exactly the reason to price the mini at $250. If they hold production on the mini down below the levels of the main line, they could make out like bandits in the following scenario: Customer walks in the store looking to spend $250 max on an MP3 player and sees the mini 4-gig as the best deal at that price; they then see the 15-gig iPod at $300 and decide "what the heck" and spend the extra $50.
Not a very original insight. I certainly wouldn't buy one. However, RTFA - there is a market at that price level, and Apple wasn't quite reaching it with the 15 GB iPod. This market apparently doesn't have a use for 15 GB. We could fill up three 40 GB iPods, but I suppose (I hope) we're not typical.
Helium balloons want to be free.
...always accurate, never correct.
Most of them will be early adopters, buying ... the established portable music player.
Last I checked, early adopters were early adopters because they bought brand new, unproven products, not because they bought established products.
And Apple's plan is not to make people switch platforms just for a music player, it's to give them a taste of the "it just works" Macintosh experience, which may entice them to check it out when (not if) they get fed up with Windows.
Your recommended resting on laurels is exactly what Steve Jobs says hurt Apple so much in the late 80s/early 90s. You very much do "have to keep going" or somebody else will do it for you. From Ars, quoting Newsweek, about Steve Jobs: "Once a company devises a great product, he says, it has a monopoly in that realm, and concentrates less on innovation than protecting its turf."
You would be talking a major loss leader then.
Your scenario assumes that Apple makes more profit on the 15G than the 4G. Which is possible, but not likely. If Apple were making a large profit on the 15G, why not just drop the price $50 and make it back through quantity? Now they've spent a lot of engineering time, manufacturing time, ad space, and patience of Apple fans to sell a product that noone will buy in favor of something more expensive with a (possibly) smaller profit margin.
Actually, you're specifically supposed to be able to exercise with it even though it's a hard drive based unit, so you do get at least that advantage. The display is also signifigantly better than those other devices listed, as is the interface (at least in my opinion). The tradeoff is really between storage and battery life when you're comparing devices of that size. The prices really aren't all that different.
Either way, I still stand by my point that it doesn't look like a good deal, so I really don't know why I'm arguing with you.
"you'll end up paying probably $350-$400 to make the iPod mini really usable."
How is the Mini-iPod not usable when you first open the $250 box? It comes with connecting cables. It comes with a whopping 4gb disk built in (you do don't even have to buy extra cards like digital cameras or other flash mp3 players). It comes with a handy belt clip. It comes with decent headphones (I concede, they're not audiophile quality). It even comes with a rechargable battery!
In short, you do NOT need to spend $350 to $400 to make this player usable. It is extremely usable right out of the box!
Cole's Axiom: The sum of the intelligence on the planet is a constant. The population is growing.
Well, the other side of the "accessories sold seperately" coin is - you could get stuck paying for items you don't want or need, if it's all bundled in at one price.
I'd never use an armband with a portable music player, for example. I tend to put them in my inner coat pocket in the winter, and other times, just leave them in my car, on my desk at work, or wherever I want to use them.
Even the remote, which I thought was a "must have" option for my iPod at first, is little more than a toy to me now. (As often as not, I use my iPod to listen to music in my car - so I can't make use of their wired remote in that scenario anyway. I just have a Griffin iTrip plugged into the top of my iPod.) It's fine for when you're actually using the earbud headphones -- but I don't find it that much more of a problem to just reach down and use the iPod's controls themselves for volume or to skip tracks.
As they say, "There's no such thing as a free lunch." When you buy something with "free bonus accessories" in the box, you can be sure you paid for them in the price of the item.
Only tangentally related, but it seems silly to spend $19 on a cable for USB2 when you could add Firewire to your computer for $8 including the cable, and have it be useful for so much more....
You've just carved out a market of about 800 vehicles tops.
Perhaps the other guy is dead on with the other 44,999,200 SUV's out there?
I don't much agree with $500 jackets and $200 jeans, as I am not a fan of fashion, but buying a nice computer isn't exactly the same thing as looking good for the sake of looking good, especially when one's livelihood depends on the amount of productivity (and least headache) one can get out of one's main workstation. And having something that looks nice never hurt anyone, either. Basically everything you buy these days short of toilet paper is designed to look aesthetically appealing (humans are visual animals... you don't prefer looking at ugly stuff, do you?), and the retail price reflects the development put into that.
Going by your logic, everyone should buy marginally acceptable computers that are *just able* to run the critical applications needed on a day to day basis, like the $10 T-Shirt and $20 jeans. That drop in demand would prevent new development, slowing the pace of technological advance in the computer industry. This principle is basically applicable to every other tech-influenced industry, as well.
If people never bought Apple (or other "luxury", as you put it, brands), the consumer adoption of GUIs, mice, "office" productivity suites, large-capacity mp3 players, laser printers, (I could go on...) would have been much slower than it was. And you could argue that these things would have been developed and adopted anyway, but that's neither here nor there, and total conjecture. There's always the cheaper alternative.
Furthermore, anyone who's ever studied economics knows that revenue and profits do not scale directly with price. "Budget" goods produced and sold in quantity routinely outpace luxury items in terms of sales, revenues, and profit. Who's worth more - Toyota or Ferrari? Toyota - by an order of magnitude or two, I'd imagine. But Ferrari makes a badass machine that can be yours for six figures. WORTH is the amount of money that a commodity can be sold for on the open market. It has nothing to do with your personal financial situation and your personal tastes and preferences. You're basically inconsequential. The market determines worth, NOT you.
It seems as if you have a fundamental problem with the principles of capitalism and how differences in price & economies of scale drive innovation and adoption. I suggest you check out a isolated economy that produces nothing but common goods for general consumption. Something like... North Korea.
The dangers of knowledge trigger emotional distress in human beings.
That's just a mistake that managers make. You can both protect your share and innovate over time. Only businesses that do BOTH become successful. Keeping the iPod form factor and reducing the price is a play that ensures market growth which enables you to innovate in the coming years. By your logic, if Apple went my suggested route, another competitor would come out with iPod mini and sink apple's cheaper player - please. First, the competition wouldn't even be as good as the current iPod (as we've seen). Secondly, they wouldn't have the iTMS. Third, it would cost more and not be as "cool" as Apple is right now. Your logic is flawed. Clearly, if Apple had just dropped the price and capacity of the current iPod it would have at least 6 months to 1 year to steal market share. Then they could think about the iPod mini which is only desirable (even currently) on the differentiating factors of size and style. Bottomline- build your market share with a great product first, then kill the remaining competition with even better products.
iPod owns the market in the $300-500 range because everyone else's MP3 players cost less than $300.
Tim
Omnia vestra castrorum habetur nobis.
Its very simple. Like all other technology before it, the portable MP3 will get a lot cheaper and a lot better. You just have to wait. The longer the better. The first DVD-R writer was $1000 only 3 years ago. Now they could be had for a measly $125 on pricewatch and with more and better features. Unless you absolutely have to have one at this exact moment (which most of us really don't), just give it a little time.
I really couldn't justify buying an iPod just over a year ago, when I was thinking about it. But I was tired of having to make tapes for long drives, so I was seriously considering getting a 10-CD changer for my car. When I priced out the low end on that, it was over $400.00, including installation.
Instead, I got a 10GB iPod at MWSF 2003 for $369 and now I have a 100+CD changer whenever I drive! And work out. And go on /.!
The CB App. What's your 20?
Yes it is. Anyone who chooses to buy the mini one is perfectly capable if they choose of instead buying the large one. It may not be apple's intent to compete with the ipod here, but given that the two do similar things in a similar price range, they are competing with each other, even if there are some differences between them.
I'd rather be lucky than good.
The hard drive technology they are using in both iPod and mini are still fairly expensive. The key to lower prices is that component becoming cheaper.
Apple is doing what they've done many times before: release a nice new product that is indeed overpriced. Then time will go on, the price will drop, and quality will go up. Remember when the iPod came out just a couple years ago? First of all, it was a bit underwhelming--$500 for a 5 GB player. Other HD-based players were larger and cheaper and remember, there was no iTMS adding value to it at the time. But time marched on, the price fell, and capacity went up. Now the same $500 gets you 8x more storage. And compare the original iPod to the new mini: one was $500 for 5 GB, the other is $250 for 4 GB.
Apple is going to make hay while the sun shines and plenty of people are going to pony up the bucks for the first gen player. These should be $199 by summer and maybe $149 by fall or XMas. And maybe Apple will drop a $99 1 or 2 GB bomb, at which popint they will totally 0wn the mp3 player market.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.