Why iPod Mini is a smart move for Apple 730
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."
Still Don't like it (Score:0, Insightful)
Americans ... (Score:-1, Insightful)
Re:Fact is... (Score:5, Insightful)
Accessories: where the money is. (Score:5, Insightful)
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?)
Let's get this out of the way... (Score:4, Insightful)
iPods Mini or Otherwise (Score:5, Insightful)
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.
Re:Accessories: where the money is. (Score:3, Insightful)
Re:Mac hardware is expensive?? (Score:5, Insightful)
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.
Re:Yeah, I almost agree... (Score:3, Insightful)
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.
Re:Accessories: where the money is. (Score:5, Insightful)
Same thing here - go in (relatively) small with the basics, at a smaller margin, then sell sell sell on the extras, where the real profit is.
It's *not* bait and switch, because you are getting exactly what's advertised - it's just not quite as useful on its own as you thought it was. That's not really the company's fault though.
Re:Still Don't like it (Score:5, Insightful)
One point he misses (Score:5, Insightful)
Re:Fact is... (Score:5, Insightful)
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? :-)
No excuse (Score:4, Insightful)
Good article (Score:3, Insightful)
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."
Re:Have you tried running with an iPod? (Score:2, Insightful)
Re:And why it's not (Score:2, Insightful)
Re:Still Don't like it (Score:5, Insightful)
Smaller form factor and colors. For a lot of people this stuff really really matters.
I run and I would much rather carry the Mini, than a full size ipod. Plus, I only have 3 gigs of music, so I really wound't get much more value out of a 40 gig player.
Jeff
Re:No excuse (Score:3, Insightful)
1) It costs that much to produce, and that price is barely above break even.
2) Market research shows that's what consumers will spend for the product, and so it's price is set there.
3) A combo of 1 and 2.
So yes, it *does* excuse it... if the market will bear that price, then it's not too expensive. Welcome to capitalism. If the market won't handle that price, they will be discounted until the "correct" level is found.... or someone like you comes out with one that doesnt' cost so much.
within a year, more iPod users than Mac OS X users (Score:2, Insightful)
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.
Re:Why not a Flash iPod? (Score:3, Insightful)
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?
Re:Heh (Score:5, Insightful)
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)
Right, there are no luxury goods.. (Score:5, Insightful)
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.
Re:Heh (Score:3, Insightful)
Re:Still Don't like it (Score:5, Insightful)
That's one reason I've been eyeing the 20GB one. I'd also like to store all my CDs on there and then box them away. The fact that I can then connect the iPod to my stereo, car, computer, etc... to use as a jukebox is also a major plus. But of course, it's still a bit much for those of us on a student's budget.
Re:Still Don't like it (Score:5, Insightful)
Re:Still Don't like it (Score:5, Insightful)
Size (Score:4, Insightful)
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.
Re:Let's get this out of the way... (Score:3, Insightful)
And if you selling at a low price... (Score:3, Insightful)
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...
Re:Still Don't like it (Score:5, Insightful)
Fuck the Dell DJ (Score:1, Insightful)
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.
Re:They let me down big time. (Score:2, Insightful)
Re:within a year, more iPod users than Mac OS X us (Score:2, Insightful)
Some people simply don't get it (Score:5, Insightful)
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.
Price comparisons are irrelevant (Score:5, Insightful)
Re:This article is 100% right. (Score:1, Insightful)
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
Re:Yeah, I almost agree... (Score:2, Insightful)
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.
Re:They let me down big time. (Score:5, Insightful)
Re:They let me down big time. (Score:3, Insightful)
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.
Re:Still Don't like it (Score:3, Insightful)
"System Integration" is vague at best, and meaningless at worst (for instance it means nothing to a Windows user). The simple fact that you can use a Karma with Linux should push it up in most slashdotters' eyes. Plus you have a choice of ethernet port. And it plays vorbis, flac and a bunch of other stuff. You can keep your "system integration" thanks. Karma integrates with _my_ system in ways an iPod never will.
Stereotypes (Score:1, Insightful)
Re:Still Don't like it (Score:4, Insightful)
Re:within a year, more iPod users than Mac OS X us (Score:1, Insightful)
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.
Re:Accessories: where the money is. (Score:3, Insightful)
The correct term, if I'm not mistaken, would be "attachments." For example, if a customer goes into a store for a printer, it won't come with the printer cable, paper, photo paper, full ink cartridges, etc. The goal of the sales person is to try to get the customer to buy these "attachments." The store makes a much bigger profit by selling these small items. That's why many places push them so hard.
I think that's what Apple is doing. By offering these items ("attachments") separately, Apple and the place selling them can make even more money than off the iPod alone.
Going back to our printer example, a printers margin might be something like 3-10%, while the printer cable has a margin of 60-70%, the ink 60-70%, the paper 30-50%, etc. Same thing with printer manufacturers. They sell the printers at a low price, sometimes even at a loss, only to make it all up by selling their ink.
Re:Old iPod with 4GB would have been cheaper... (Score:1, Insightful)
Re:They let me down big time. (Score:3, Insightful)
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.
Re:Yeah, I almost agree... (Score:3, Insightful)
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.
Re:Not a loss leader for apple (Score:2, Insightful)
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!
Re:Let's get this out of the way... (Score:3, Insightful)
I'm not saying it will, mind you; I just don't think those of us outside Apple have any real reason to know. Unlike WMA, whose spread Apple might actively be trying to fight for strategic reasons, there's no real reason for them to object to OGG. The only reason for them not to support it is that there's not much reason to support it. As I see it, they could very easily go either way on official OGG support in iTunes and the iPod, and there's no reason for any of us to say they will or won't do so.
Re: extra $'s for the extras (Score:5, Insightful)
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.
Re: About the extras... (Score:3, Insightful)
Comment removed (Score:4, Insightful)
Re:One point he misses (Score:3, Insightful)
Not to mention that Apple typically is not able to produce enough of these sort of items to fulfill demand. They probably had a choice: make x units and sell them at $199, making little profit and not being able to meet demand or make x units and sell them at $249, still selling all they could make. They will probably sell close to all the units they can make at either price, it just makes sense to sell at the higher price and make a good profit.
Once Apple's manufacturing capacity for these devices goes up their costs will go down due to economies of scale. By that time the demand for the iPod mini will have gone down. Apple can then drop the price, increasing demand to match their production capacity and still making a profit from the lower production costs.
Wow. (Score:1, Insightful)
Perhaps the other guy is dead on with the other 44,999,200 SUV's out there?
You're taking a naive, extremist view. (Score:3, Insightful)
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.
Re:Still Don't like it (Score:4, Insightful)
Re:Old iPod with 4GB would have been cheaper... (Score:2, Insightful)
Re:iPod marketing and pricing space (Score:3, Insightful)
Tim
Re:Accessories: where the money is. (Score:5, Insightful)
leather case
You'll never see one of these coming with an iPod. It's not because Apple is cheap, either (leather is cheap anyway) but because Steve is a vegetarian. Also, the Jaguar pattern on their box was rendered by Pixar because Steve didn't want to use a real Jaguar (hint, you have to take the skin off to get it that flat)
All you have to do is wait (Score:2, Insightful)
Re:Really smart move (Score:3, Insightful)
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 /.!
Re:They let me down big time. (Score:3, Insightful)
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.
Re:Still Don't like it (Score:2, Insightful)
I think the difference is the geek factor. The Karma attempts to do too much for someone who simply wants to listen to music. The iPod is stylish (personal opinion, it is more so, by far, than the Karma) than the Karma and more simple to use.
Re:its the time of the season (Score:2, Insightful)
too late to get modded up, but what the hell (Score:3, Insightful)
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.