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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."
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Why iPod Mini is a smart move for Apple

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  • by ivan256 ( 17499 ) * on Tuesday January 27, 2004 @01:48PM (#8101635)
    I'm as much as an Apple fanatic as most of em; I've got my two Dual G4s, my powerbook, and my 3rd generation 20Gb iPod, and I'd agree with this article completely except for one thing...

    It costs an extra $120 to get all the accessories that should come with the damn thing! Why is it so much extra to get the armband, the dock, and the remote? For $250 the should be included.
    • by mekkab ( 133181 ) * on Tuesday January 27, 2004 @01:52PM (#8101687) Homepage Journal
      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?)
      • Yeah, I guess... But with cameras these days you at least have that feeling of "it was only $250!", but with the iPod Mini we're starting out with "holy crap! $250?" before they stick you for the accessories.
      • by Tim C ( 15259 ) on Tuesday January 27, 2004 @01:58PM (#8101763)
        "Upselling" is what our sales guys tend to use when talking about getting a client in for eg a usability study, or hosting, or whatever, with a view to gradually selling them more of our services. So, we start out small, they get to know us, then we sell them a whole new website with support, etc.

        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.
        • Actually, "upselling" is the wrong term. "Upselling" usually refers to when a customer comes in for a particular item, let's say a printer, and then the sales person talks them into a different and more expensive model which also has the fatter margins. That's "upselling."

          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 i

      • by theLOUDroom ( 556455 ) on Tuesday January 27, 2004 @02:30PM (#8102191)
        Not necessarily, my iRiver ihp-120 (ipod++) came with:

        • USB 2 cable
        • line output cable (1/8" to 1/8", 6' long)
        • LCD wired remote (better than any ipod's)
        • External microphone (even though it has an interal one)
        • leather case
        • mini headphone extension (3" long to deal with headphones with large o.d. plugs)
        • DC power adapter

        Sometimes it pays to not be blindly loyal to a particular brand. I was shocked at how much extra stuff was in the box.
    • 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
    • Indeed, but at least the iPod mini comes with the USB 2 cable, which some Windows users will need; for the "regular" iPods, it's $19 extra. That means for someone with a PC with USB 2 but not FireWire, the price difference between the mini and the 15 GB is effectively $69, not $50, and the 15 GB is on the other side of the psychologically important $300 barrier.

      I do agree it'd be great if they all came with all the accessories, though. It's not just the mini; the 15 GB doesn't come with the dock, remote o

      • 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....
    • by King_TJ ( 85913 ) on Tuesday January 27, 2004 @03:37PM (#8103074) Journal
      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.
    • by Caesar ( 9965 ) * on Tuesday January 27, 2004 @01:57PM (#8101748) Homepage
      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.
  • by nicedream ( 4923 ) <> on Tuesday January 27, 2004 @01:53PM (#8101691) Homepage
    Sure you say "I can get 11GB more storage for only $50!!" But that is the geek inside of you, always wanting bigger, better, faster, more.

    How many people don't even have enough MP3s to fill the 4GB mini? Answer: A LOT. They don't give a crap that they can have every MP3 in the world in their pocket. They want something easy to carry, and being cute pink helps too.

    I have always admired the ipod for its design and interface, but even with as small as they made it it was too big for me so I have been through a few flash players. But come Feb 16, guess which new player I'm going to have....

    Also, IMO, the ipod mini is going to pave the way for where the ipod is going. As the 1 inch hard drive capacities go up to the 10, 20, 30 GB range, I can forsee a time when the ipod is discontinued and the mini takes the center stage.
    • How many people don't even have enough MP3s to fill the 4GB mini? Answer: A LOT I disagree. Everyone I know who actually can spell MP3 and rip MP3s has a lot more than 4 gigs. I personally am at 93 gigs in my collection right now, and I still have 250 CDs to rip. With my '40' iPod, I can carry less than half my music . Don't get me wrong - it's better than nothing (or 512k or 4 gigs). But it's not enough. Never enough. Give me more more more space!
      • by Carbonite ( 183181 ) on Tuesday January 27, 2004 @02:31PM (#8102211)
        How many people don't even have enough MP3s to fill the 4GB mini? Answer: A LOT

        I disagree. Everyone I know who actually can spell MP3 and rip MP3s has a lot more than 4 gigs. I personally am at 93 gigs in my collection right now...

        You are a geek with geek friends. You are reading a geek site. You are not typical. I'm not insulting you, I'm also a geek with (mostly) geek friends who is replying to someone on a geek site.

        The point is that very few people have 93 gigs of music. Most people don't have 4 gigs of music and those that do probably don't need to put their entire collection in their iPod mini. This product is aimed at the mainstream and you are simply outside of that.
        • Rough estimate here, but 4GB of MP3s equates to a little more than 80 average CDs. An unscientific poll of my cousins under 18 shows that one out of ten have more than 80 CDs (either originals or copies from friends). The irony being none of them have $250 to blow on an iPod.
  • by molafson ( 716807 ) on Tuesday January 27, 2004 @01:54PM (#8101702)
    "But does it have OGG?" (Answer: No, and it never will.)
    • Exactly. Ogg vorbis happens to be my codec of choice, simply because it sounds better with higher compression rates. I really wish a bigger community would see that, though i would hate to see the codec twisted by some hacked-in DRM...
    • No, it doesn't have OGG now; how do you know it won't get it, though?

      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 th

  • I think the price comparison chart is a bit off, since there are cheaper 512mb players to be found. I got mine at []. No, I don't work for them. Oh yeah, it doubles as a USB drive.
  • And why it's not (Score:2, Interesting)

    by prostoalex ( 308614 )
    Read Robert Scoble on why Apple is locking users into the DRM only one product supports (iPod) []. Scoble works for Microsoft, for those, who didn't know.
  • by Apiakun ( 589521 ) <tikora AT gmail DOT com> on Tuesday January 27, 2004 @01:55PM (#8101714)
    As he states in the article: "Secondly, the iPod is cool. Apple is cool. Is the iPod Mini cool? As a married, Caucasian male in his mid-30s who thinks he looks good with a shaved head, I feel somewhat ill-qualified to judge what is and is not hip." Is he trying to review the iPod, or to tell us he's a member of the Aryan Nation?
  • by jcsehak ( 559709 ) on Tuesday January 27, 2004 @01:55PM (#8101726) Homepage
    I was just looking at an article in the paper about this, and similar devices by other manufacturers weren't very much less, and in many cases had much less HD space. And objectively speaking, they weren't nearly as cool. So I won't begrudge Apple their pricing scheme.

    But still, it's not like it's wristwatch-size. When I heard the rumors of a small iPod, I shrugged and said "it's already small." It's like hearing about a new version of Photoshop. I was happy with version 6.
  • by EraseEraseMe ( 167638 ) on Tuesday January 27, 2004 @01:56PM (#8101731)
    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.
  • I too! (Score:2, Funny)

    by overbyj ( 696078 )
    Secondly, the iPod is cool. Apple is cool. Is the iPod Mini cool? I too think the iMini iPod is iCool! I want iOne iNow! Just iLower the iPrice to i$199 or lower Steve.
  • by smartin ( 942 ) on Tuesday January 27, 2004 @02:00PM (#8101785)
    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.
    • by Graff ( 532189 )

      ...people that will pay $249 for them. When those people run out they can drop the price to $199...

      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 a

  • No excuse (Score:4, Insightful)

    by adrianbaugh ( 696007 ) on Tuesday January 27, 2004 @02:01PM (#8101793) Homepage Journal
    The fact that Apple's product is too expensive isn't excused by the fact that all its competitors are too expensive too.
    • Re:No excuse (Score:3, Insightful)

      by veddermatic ( 143964 )
      Huh? Obviously if multiple companies have similar products at the same price point then one of the following is true:

      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 unti
  • Good article (Score:3, Insightful)

    by CptChipJew ( 301983 ) <`moc.liamg' `ta' `rellimleahcim'> on Tuesday January 27, 2004 @02:01PM (#8101805) Homepage Journal
    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."
  • iPods have always been over^H^H^H^Hpremium priced... welcome to Apple hardware. i would buy one if they cost less than doing a major upgrade (new proc and mobo) to my existing pc hardware
  • by shawkin ( 165588 ) on Tuesday January 27, 2004 @02:02PM (#8101826)
    Teen age girls. They buy a lot of music.
    Fashion is important. Small is important; their purses are full of stuff.
    Think of it as technical jewelry.
    I know girls who are buying all five colors to match their outfits and moods.

    • I know girls who are buying all five colors to match their outfits and moods.

      You know the Hilton sisters?!?

  • Really smart move (Score:5, Interesting)

    by suntory ( 660419 ) on Tuesday January 27, 2004 @02:07PM (#8101894)
    The iPod Mini has also had an interesting side effect. Before Apple announced it, everybody thought that paying 300$ for the lower iPod was crazy, and that it was greatly overpriced. Today, most people believe that the 300$ iPod is the best option available, and that it is reasonably priced. Definitely, these Apple guys are marketing geniuses...
    • It really is just a matter of perspective, isn't it?

      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 /.!

  • by jwachter ( 319790 ) <> on Tuesday January 27, 2004 @02:18PM (#8102026) Homepage
    This is an interesting an analysis that Ars did not do: calculate the number of gigabytes per cubic inch packed into each of these machines. On this metric, the iPod mini is the winner by a decent margin (1.11 GB/in^3 for the iPod vs .93 for the Nitrus and .74 for the MuVo2).

    Below you'll find the analysis. First column is number of gigabytes, second column is the size of the device in cubic inches. The third column is the ratio, "storage density". Notice that the Rio Nitrus is the only unit which comes close to Apple.
    Company Device Gigabytes Size Density
    Apple iPod Mini 4.00 3.60 1.11
    Creative MuVo2 4.00 5.41 0.74
    Rio Nitrus 4.00 4.32 0.93
    iRiver iGP-100 1.50 8.65 0.17
    Rio Nitrus 1.50 4.32 0.35
    Sony NW-MS70D 0.256 2.40 0.11
    iRiver iFP-195T 0.512 4.03 0.13
    Creative Muvo TX 0.512 2.44 0.21
    DigitalWay MPIO FY-200 0.512 2.45 0.21
    Rio Chiba 0.256 5.18 0.05
    iRock! iRock! 860 0.256 3.24 0.08
    (Anyone know of a way of making columns show up in slashdot posts?)

  • by depeche ( 109781 ) on Tuesday January 27, 2004 @02:22PM (#8102064) Homepage
    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.

    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 /.--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.

    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...
  • by AvantLegion ( 595806 ) on Tuesday January 27, 2004 @02:26PM (#8102134) Journal
    If you're a person that says "I can get 11GB more fo..." (no need to even finish the sentence), then you are not the market for this product.

    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.

  • by __aarimw2106 ( 642129 ) on Tuesday January 27, 2004 @02:27PM (#8102145)
    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.
  • Wanted: Competition (Score:3, Interesting)

    by drix ( 4602 ) on Tuesday January 27, 2004 @02:40PM (#8102318) Homepage
    When is somebody going to wake up and engineer a blatant ripoff of these things to sell without the "Apple tax"? They could probably come in $100 cheaper. I realize Dell, Rio, et al. have released a host of knockoffs, but for reasons that escape me no one has ever gotten it right:
    • Lightweight, metallic case
    • Teeny form factor
    • USB2 or FireWire interface
    • Backlit LCD
    • Easy navigation/interface
    And so on. It seems like every player on the market gets maybe four of the five, except for Apple, which nails all of them. And Apple crushes the market. I ran into the exact same thing last month when I was shopping for a laptop: want one that has the best 3D graphics card (ATI MR 9600 Pro), thin profile, light weight, beautiful LCD widescreen, WiFi, bluetooth, metallic case, etc? You have but one choice [], my friend. I realize maybe Apple has a brilliant, one-of-a-kind group of innovators dreawming up all these great products. But it shouldn't take a world-class engineering team, or even a particularly brilliant one, to simply knock off all their products and give Apple a little healthy competition.
  • by eunos94 ( 254614 ) on Tuesday January 27, 2004 @03:14PM (#8102781)

    Why would someone spend $250 for 4 gigs in a iPod Mini, when I can by a brand new Dell Dimension 2400 with 40 gigs of space on it for only $400! That's only $150 more dollars for 36 more gigs of memory!

    It's ridiculous that they could charge that much for something with no storage in it at all. I don't care if it's a little smaller. It's absolutely a crime that they should even insult us like this.

  • by dfung ( 68701 ) on Tuesday January 27, 2004 @04:32PM (#8103748)
    I visited Macworld this year and spent some hands on time with both the iPod and iPod Mini. Even though the previously separate control keys from the original iPod were consolidated with the "wheel", I greatly preferred the user experience of the Mini. The latest (3rd generation?) big iPod has a sort of virtual dial, and the "buttons" have no tactile feedback. The Mini overloads the functions on the dial, but does it with a tiny click which I found much easier to use.

    So, even though I see the 15GB iPod is much more compelling from a value standpoint, I sort of suffer from the reverse problem - I'd rather have a Mini with an even larger drive but the same operating controls. That market is defintely going to be the last one served here!

    Both iPods seem inferior at a glance to the very original iPod. It was too expensive and (now) not a good story on space, but the wheel (an actual physical control) was just awesome.

    I think iTunes is pretty good too, but one of the things you rarely see mentioned here is that there's a huge gap in feature set between the Mac and Windows versions. No, it's not in the app or music libraries, it's in the support of players. The Mac version of iTunes supports any mp3 player capable of playing MP3 or AAC which is pretty much everybody if you don't want to play the music you bought at the iTMS (they're all AAC).

    The Windows version of iTunes is identical in functionality to the Mac version if you have an iPod. But it appears that iTunes Windows won't sync with anything other than iPods.

    Sadly, Apple is shooting itself in the foot here. Given a choice between iTunes and anything else, iTunes would clobber all comers. iTunes is well thought out and implemented, while the alternatives seem thrown together or hacky. But, if I can't organize my world on my PC and sync to my non-iPod, I just won't use iTunes no matter how good it is.

    This protects Apple's iPod sales vs. the competition (on Macs, you've already paid your tribute to Apple when you got your Mac!) but at great cost. If iTunes in visibly better designed software than it's competitors, it's only a matter of time (and short time, I think) before the desirable interface aspects are ripped off. And just like productivity apps, you reach a point where adding more features and innovation has a diminishing return.

    iPod profits pay for iTunes, so there's really no other way this can be. But I feel bad to see Apple miss a chance to really lock up their domination of the iTunes-like app world because of this business model. As an ex-Apple employee and Apple watcher, I hard to see this mistake being repeated - they really are poised to achieve a Windows-like stranglehold on the computer end of the formula, but by closing off the other players (that the cited article shows they can beat anyway!) they're marking themselves for death.
  • by sootman ( 158191 ) on Wednesday January 28, 2004 @12:07AM (#8109055) Homepage Journal
    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.

All science is either physics or stamp collecting. -- Ernest Rutherford