Informed Guesses on New iPod Family Pricing | iLounge Backstage

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Informed Guesses on New iPod Family Pricing

The discussion around iLounge this morning: iPod family pricing. There’s been buzz for months that Apple “needs” to reduce the prices of the iPod touch lineup—and possibly all iPods—in order to offset the $199*** 8GB iPhone 3G.

(*** = Not really.)

If we’ve learned anything over the past seven years of iPod releases, it’s that Apple doesn’t drop iPod prices just for the hell of it. It also has a tendency to quietly take things away, like pack-ins, when it does drop a product’s price… except, of course, that there isn’t much left to take away from current iPods, which now ship only with USB cables, headphones, and Dock Adapters. But after a year that saw iPod sales slow down at one point for the first time in years, jumping after an aggressive “buy Mac, get iPod free” deal, price drops seem like they’re in the cards. So what’s going to happen next week?

We’re guessing that we will see legitimate price drops on certain iPod models. It is quite possible that the new lineup will look like this:

iPod shuffle: $49 (2GB)
iPod nano: $99 (4GB), $149 (8GB).
iPod touch: $199 (8GB or 16GB*), $299 (16GB or 32GB*), $399 (32GB or 64GB*).
iPod classic: $199-249 (80GB or 120GB), $249-$299 (120GB or 160GB).

Apple’s numerous hints at a major product transition with a profitability impact suggests that this pricing scenario—at least the iPod nano and touch part—is fairly likely. There are other nano possibilities, such as similar prices to today’s plus higher capacities, but they seem unlikely at this point. And dropping the shuffle altogether is another option, but every time people think that model is dead, Apple keeps it going.

iPod touch 2G: Preserving the iPhone 3G Gap. The real questions relate to the second-generation iPod touch and iPod classic, and then mostly on the capacity to pricing model. Conventional wisdom would suggest that Apple will keep touch capacities the same (8GB to 32GB) and simply drop the prices. This would narrow the nano-to-touch price gap from $100 to $50, giving users the choice of a better screen and the iPhone OS as a small “step up.” It would also disappoint everyone who wants to see 64GB and 128GB touches right now, but this wouldn’t be a huge surprise, and there wouldn’t be a huge capacity gap between the most expensive iPhone 3G ($299***/16GB) and the most expensive iPod touch ($399/32GB).

* = But Apple could introduce a $399*** 32GB iPhone 3G, which would make the 16/32/64GB iPod touch scenario more likely. Your choices would then be:

$199: 8GB iPhone 3G***, 16GB iPod touch
$299: 16GB iPhone 3G***, 32GB iPod touch
$399: 32GB iPhone 3G***, 64GB iPod touch

A tougher call, right? A lot of people would actually go with the iPod touch then over the iPhone 3G. Apple probably doesn’t want that to happen, so our guess is that modestly repackaged, cheaper 8GB, 16GB, and 32GB touches are this year’s pitch.

iPod classic: The Wildcard. What about the iPod classic? Toshiba, Apple’s iPod hard disk provider of choice, now seems to wait for Apple before announcing its latest and greatest 1.8-inch hard disks. Last year, it upped the ante with a 160GB drive, and it might have a surprise this year, too. As leading competitor Samsung hasn’t yet announced a 1.8-inch drive with more than 160GB capacity, our guess is that Toshiba’s in the same boat, and capacity will stay the same while price will go down. One of iLounge’s editors thinks that Apple might drop the 160GB model’s price to $249; this would be a very aggressive move.

Our belief is that the single biggest factor influencing the iPod classic’s price is the presence of Microsoft’s Zune in the marketplace—no matter how much Apple tries to blow the Zune off, it’s concerned that Microsoft could steal sales from the iPod with a hard disk model that offers better pricing or capacity. A 120GB Zune is definitely coming, and apparently for $249. The only question is whether Apple will try to undermine Microsoft with a $199 80GB model and $299 160GB model, go for parity with a $249 120GB classic and $299 160GB model, or unleash some hell with a $199 120GB model and either a $249 160GB model or a surprise $299 version with more capacity. Our money would be split on the first or second options.

We’ll know for sure next week… but what do you think is likely? We look forward to seeing your thoughts in the Comments section below.

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Comments

1

Apple needs to be a lot more aggressive with the Nano price than 8GB for $149.

You can already get a 16GB Sansa for $135 or a 16GB Creative Zen for $161 from Amazon.  Even $199 for an 8GB Touch is pushing it. To stay even remotely competitive Apple would need the following pricing….

Shuffle:
2GB - $49

Nano:
8GB - $99
16GB - $149 (or just offer one Nano)

Touch:

8GB - $199 (pushing it, but Apple could get away with it)
16GB - $249

32GB - $349

Classic:
80GB $199
160GB $299

or

120GB - $249
160GB - $299

Posted by kdt on September 4, 2008 at 12:35 PM (CDT)

2

I kind of like the capacity/pricing parity model for Touch\iPhone:

8GB iPhone = 8GB Touch = $199
16GB iPhone = 16GB Touch = $299
etc.

Then for any given price\capacity the consumer can choose whether they want a phone (with the extra associated costs) or a music player\PDA (no extra cost).

I think if Apple was super aggressive and sold the 16 GB Touch at $199 (and so on), that would cannibalize iPhone sales too much (since you could get twice the capacity for the same price), and I’m sure Apple would rather sell iPhones (which net them $399-$499 for 8GB once you add in the carrier subsidy) than Touches.

Still hoping for a 32 GB iPhone (maybe next February?)

Posted by Dyvim on September 4, 2008 at 12:45 PM (CDT)

3

I could probably talk myself into buying a $399 iPod Touch IF it has at least 64GB of storage. Why they haven’t put a HD in the Touch is beyond me. Especially since this thing is really designed for video. Even more so considering the rumored HD video content coming next week. Heck, I have to swap stuff on and off my 30GB 5G and manually manage my music, Podcast, and especially vedio collection now. (Solid state means nothing to me, I’ve dropped my 5G many times. The case was protected by my leather carrying case, so no damage there. But the HD was in use every time and it has never skipped a beat. Pun intended.)

Posted by jsk on September 4, 2008 at 2:04 PM (CDT)

4

I think this is the pricing lineup Apple will have over the next year. It has a certain symmetry that Apple seems to like and also allows for modest price drops where they make sense. The big question is when will these changes come and what technical changes we’ll see to the shuffle, nano, touch, or classic next week.

Posted by jayped on September 4, 2008 at 2:09 PM (CDT)

5

iPod shuffle:    $49 (2GB)
iPod nano:    $99 (4GB)
iPod nano:    $149 (8GB)
iPod touch:    $199 (8GB)
iPhone:      $199 (8GB)
iPod classic:    $199 (80GB)
iPod touch:    $299 (16GB)
iPhone:      $299 (16GB)
iPod classic:  $299 (160GB)
iPod touch:    $399 (32GB)
iPhone:      $399 (32GB)

Posted by jayped on September 4, 2008 at 2:10 PM (CDT)

6

I think those numbers look pretty good. I think Apple’s realizing that the market for MP3 players is becoming saturated. To stave off Microsoft, preserve market share, and convince iPod owners to upgrade, dropping the prices makes sense.

I wonder if Apple will simply dump the classic and create a HD version of the touch to really stick it to Microsoft (“High capacity music/video only players are soooo 2007,” Jobs could say). I know it’s been bantered about on the boards here, but I could see Jobs saying something like, “A lot of you said you couldn’t take your entire collection on your touch. Well, now you can have it all and rock out with our new hard-drive based touch with 160GB of storage.” It’s certainly possible, but I don’t know how probable.

Posted by cxc273 on September 4, 2008 at 3:50 PM (CDT)

7

reading all this makes it appear that none of you expect any real feature and hardware changes. All you are talking about is prices and capacity whiie Apple has suggested bigger changes. I doubt that MS crosses their minds for any reason. MS is out of the game because they cannot do anything that Apple has not done and no one can do high enough volume to match Apples prices. That is how Apple keeps good profit and keeps others from making any real money. MS can lose money for awhile but there are limits to everything. They lose money in everything they do outside of Office and Windows; So it is not just a Zune problem.

You all may be correct in iPods only changing in price and capacity but I thought Apple was saying a bit more would happen.

Posted by rogre on September 5, 2008 at 11:23 AM (CDT)

8

Sorry but I will NOT buy a touch at that price, or any price, till they increase memory to AT LEAST 64g.  Happy with my 160g Classic till then!

Posted by JohnnieFive on September 5, 2008 at 11:26 AM (CDT)

9

Get me an iTpuch > 80 Gig (pref a 160) for $400, and the money is yours, Mr Jobs - but not until then. Like other folks, I’ve had it with having to choose which items to put onto my 30-Gig iPod - especially since I am now only going ‘lossless’ and want video (incl. podcasts) and my photos on the pod.

Posted by Larry on September 6, 2008 at 6:34 AM (CDT)

10

I’m with JohnnieFive and Larry.  As much as I covet the touch, I’m not willing to step down in size from my current 60GB 5G and give up the ability to carry my whole collection.  It’s >=64GB or nothing for me.

Posted by moose on September 7, 2008 at 1:01 PM (CDT)

11

Apple hasn’t added a HDD to the touch because if would cannibalize classic sales. The touch is a huge threat to everything for Apple (classic, nano, iPhone). They have to handle it REALLLY carefully, so I see no major upgrades coming to it, and no 64Gb version, unless they’re upgrading the iPod classic to 120GB. It would just be easier for them to cancel the whole thing.
So since not much updates to the touch, I’m guessing they’ll cut the price for it, the only line to get price cuts (aside from the 160 GB classic)

Knowing Apple, somehow I’m doubting we’ll see many price cuts. Rather they’ll improve the performance of everything. It’s more profitable that way.

Shuffle: who cares, really, but 2GB for $49. That seems to be a given…
nano:      8GB   $149
            16GB   $199
classic:    120GB   $249
            160GB $299/$349 not really sure which… but to compete with Microsoft it’ll probably be the former
touch:      8GB     $199/$249
            16GB   $249/$299
            32GB   $299/$349

I’m not so sure which of those 2 options it will be for the touch, a $50 drop or a $100 drop, but if it’s a $100 it might hurt the nano… at any rate we’ll know in a tomorrow.

Posted by Jimmy97 on September 8, 2008 at 1:02 PM (CDT)

12

Apple hasn’t added a HDD to the touch because if would cannibalize classic sales. The touch is a huge threat to everything for Apple (classic, nano, iPhone). They have to handle it REALLLY carefully, so I see no major upgrades coming to it, and no 64Gb version, unless they’re upgrading the iPod classic to 120GB. It would just be easier for them to cancel the whole thing.
So since not much updates to the touch, I’m guessing they’ll cut the price for it, the only line to get price cuts (aside from the 160 GB classic)

Knowing Apple, somehow I’m doubting we’ll see many price cuts. Rather they’ll improve the performance of everything. It’s more profitable that way.

Shuffle: who cares, really, but 2GB for $49. That seems to be a given…
nano:      8GB   $149
            16GB   $199
classic:    120GB   $249
            160GB $299/$349 not really sure which… but to compete with Microsoft it’ll probably be the former
touch:      8GB     $199/$249
            16GB   $249/$299
            32GB   $299/$349

I’m not so sure which of those 2 options it will be for the touch, a $50 drop or a $100 drop, but if it’s a $100 it might hurt the nano… at any rate we’ll know tomorrow.

Posted by Jimmy97 on September 8, 2008 at 1:09 PM (CDT)

13

I’ll be more than shocked if Apple continues to sell a 4G nano at any price and fails to sell a 16GB nano at $200 or less. Flash memory prices on the smaller capacities have dropped so low that the difference in parts between a 4GB nano and an 8GB nano is only a few dollars, so, even for Apple, keeping the 4GB in production when there are 32GB players from competitors in the $250 range already is unwise. I mean, even if you lower the 8GB to $150, are not already under the spell of the koolaid really going to settle for a video capable iPod with only 8GB for $150, when for the same price you can have a 16GB video capable Sansa? Sure, Apple doesn’t necessarily compete on specs, but the nano prices in the above article are waaay out of touch with the current competition.

Posted by Code Monkey in Midstate New York on September 8, 2008 at 1:59 PM (CDT)

14

Whoops, typo. The above should be “... even if you lower the 8GB to $150, if you are not already under the spell of the koolaid, are you really…”

Posted by Code Monkey in Midstate New York on September 8, 2008 at 2:01 PM (CDT)

15

Shuffle: 2GB - $49.99

Nano: 8GB - $99.99
      16GB - $149.99

Ipod Touch: 16GB or 32GB - $249.99
            32GB or 64GB - $349.99

I would definitely buy a Ipod Touch if Apple releases a 64GB version cuz my music library is like over 40GB already.. XD

Posted by IpodLOVER <3 on September 8, 2008 at 11:34 PM (CDT)

16

What about this for nano pricing?

8GB - $129
16GB - $179

I know this wouldn’t fit neatly within the -49 or -99 pricing structure, but for that matter, neither does the current 2GB shuffle, and this would make the nano more appealing without chopping down the base model’s price like crazy.

Posted by Jerome on September 9, 2008 at 12:03 AM (CDT)

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