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Backstage: Guessing what’s to come in January

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Wednesday, December 29, 2004
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With only a couple of weeks left until Apple reveals its newest lineup of iPods (and possibly computers) to the world, I figure that a few words are in order as to what we’re expecting to see at the Macworld Expo in San Francisco.

Sum it up as “triumph of the low-end.” For the last year, iLounge has repeatedly said that the future of the iPod brand is (for better or worse) in offering products at price points that average people can afford. If analysts and business magazines can be believed, Apple is ready to do that in a big way, and will announce at least three new low-priced iPod-related products at the Expo.

It’s all but a foregone conclusion that Apple will introduce a flash memory-based version of the iPod, with most analysts and business magazines assuming that the device will retail at $99 and up and come in multiple memory sizes from 256 megabytes (60-65 songs) to 1 gigabyte (250 songs). The device’s name remains unknown - but titles from “iPod flash” (unlikely) to “iPod micro” (possible, but increasingly unlikely given other “micros” like the Creative Zen Micro) have been tossed out, and other theme-based possibilities like “iPod sport” are out there as well. Apple will score 100 iLounge bonus points if they design these things to function as high-end remote controls for current-model iPods, and lose 200 points if they eliminate the iPod’s screen altogether. We’ve spent enough time with Oakley’s Thump to know what screenless music surfing is like with a library of 30 songs, and we’re not ready to do that with a 125- or 250-song library. Are you?

Recent comments from Apple have also strongly suggested that the company is preparing to jointly introduce an iPod-ish GSM phone (some are calling it iPhone) with Motorola, featuring iTunes compatibility, music storage, and of course, cellular phone capabilities. Apple design and branding would be a fair bit more than the companies let on in their mid-2004 press release, but not hugely surprising. Let’s hope it’s at least as cool as Motorola’s Razr phone, though I’m thinking it’ll be more like a V600 than that, and Apple is hinting that it’ll be priced at or around the $300 level.

The other big story circulating in analysts’ circles is the replacement of the current model 4GB (1,000 song) iPod mini with a 5GB (1,250) version. While I’m betting that this one will happen as well, the real question is how the iPod mini’s pricing will change as a consequence. Based on current inventory levels of iPod mini hardware - surprisingly robust at Apple Stores we’ve visted, given today’s proximity to the Expo - there are a couple of possibilities. Apple could drop the 5GB iPod mini’s price to $199 and close out 4GB units at $149. Or it could try to sell 5GB iPod minis at $249 and clear out its remaining 4GB hardware at $199. Depending on the price range of flash-based iPods to be introduced, it wouldn’t be surprising if Apple went the higher-priced route - though it would definitely not be our preference to see things go that way. The oratorical appeal of demonstrating the falling price of a 5GB iPod from $399 in 2001 to $199 in 2005 is just too great.

Post-Expo, the iPod family seems quite likely to spread from $99 to $599, flash at the lowest end, followed by mini, full-sized iPods, and iPod photos at the top. Later in the year, it wouldn’t be any shock to see Apple phase out the 40GB iPod and replace it with the 40GB iPod photo at $399, drop the 60GB iPod photo to $499, and offer a high-end video variant at the $599 price point. What do you guys and girls think? Will Apple hit the magic $99 mark? Will it pull its punch again and go with a $149 flash iPod, $249 mini, and $299+ full-sized iPod? Will they drop any other iPod prices, or keep them where they are?

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Comments

1

I would like to see a 10 GB iPod mini. The mini form factor ROCKS, but 4 or 5 gig is just not enough.

I could see price points play out like this:

Flash based iPod = $99 - $149
5 GB mini = $199
10 GB mini = $249
20 GB iPod = $299
etc.

That would round out the offerings quite nicely, with products throughout a range of price points.

I’ll just keep dreaming…

wink

Posted by gadgetboy in NJ on December 29, 2004 at 5:43 PM (PDT)

2

For what it’s worth, I personally hope Apple won’t bother with a 256MB flash-based iPod, and just goes with 512 / 1GB. And a 10GB mini - if the drive became available - would be insanely popular.

Posted by Jeremy Horwitz in East Amherst, NY, USA on December 29, 2004 at 7:09 PM (PDT)

3

I’m looking forward to the announcements.

Will anyone else be at MacWorld?

Posted by Cap'n Hector in Sacramento on December 30, 2004 at 8:11 AM (PDT)

4

Personally I hope Apple sees sense and any Flash player it might ship comes with an SD slot for expansion. Why be stuck with a limited amount of fixed on-device RAM? That’s so 90s. Apple could then sell “recharger” cards of 512MB-4GB each, with the selling price subsidised by bundled “pack-in” music. Companies would pay for that kind of exposure. It woud be a nice way to maximise revenue stream from Flash buyers - expect them to buy 2-4 cards per year. Also, these kind of low-price low-tech products would be a good way for Apple to get counter space in a wide range of boutiques and malls. Think of how many value-add debit cards and gift cards are sold at the checkout lines in supermarkets… This kind of model also scales well in Asia, where credit card usage is low and many people are accustomed to buying credit in pre-paid blocks from on-street vendors. There is a *vast* distribution network of wholesalers and vendors ready and willing to sell card-sized product.

Posted by Demosthenes on December 30, 2004 at 8:30 AM (PDT)

5

In relation to the mini stuff, my pessimistic side says Apple will release a 5GB version incredibly similar to the 4GB one we have now, but with at least one or two useless but marketable features (remember shuffle songs in the main menu?) in order to get people to pay $249 for the new one and they will quickly sell out of $199 4GB units. My optimistic side thinks the new mini will be priced at $199, have much better battery life, possibly 10GB storage capacity and maybe will be slightly smaller. But knowing Apple, not likely.

Posted by Nuke666 in Melbourne, Austalia on December 31, 2004 at 6:56 PM (PDT)

6

I’m thinking that they will change the Mini to 5GB for the same price and release flash-based iPods for the prices and capacities as stated above. I’m also thinking that they will release an ‘iPhone’ but I don’t know what special things they might have for it.
And this rumor seems pretty interesting:
http://www.thinksecret.com/news/0412expo2.html

Posted by dino in Saskatoon, Saskatchewan, Canada on January 2, 2005 at 4:02 PM (PDT)

7

I’m really excited about the prospect of a cheaper iPod… However, I don’t think 100-200 songs is enough for Apple.  How does one get more songs without increasing cost?  A new codec!  Thus:

I hope we see the rumored-to-be-ready AACplus at the same time as a flash iPod… It would be much better for Apple to be able to offer great sound quality at only 64kbps… especially when you only have 512MB to 1GB to deal with.

Posted by Jerrod H. in TX on January 5, 2005 at 8:49 PM (PDT)

8

Well now that they have been released, I know that I am getting one.  It seems like there wasn’t as much unveiling as everyone thought there would be.  I want to get the 512MB iPod shuffle.

Posted by jpod999 in california on January 12, 2005 at 9:14 PM (PDT)

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