Amazon reports that the among the top selling electronics products this holiday season were the Apple 20GB iPod and the Apple 4GB Silver Mini iPod. Consumer electronics sales surpassed book sales on Amazon Thanksgiving weekend and was Amazon’s largest sales category for the first time.
Apple has applied for a patent on technology that would allow an iPod to detect when it is falling and then stop reading or writing to the hard drive, increasing the chance that its insides would survive the drop. “The portable-computing device protects its disk drive by monitoring for such accelerations and operating to avoid usage of the disk drive during periods of acceleration,” Apple said in the patent application, which was published Dec. 16. “Through such protection, the likelihood of damage to the disk drive or loss of data stored on the disk drive is able to be substantially reduced.”
Apple Canada and Canadian retailers such as Future Shop and Best Buy will reduce the price of all iPods in response to the recent Federal Court of Appeal decision throwing out the levy on music players with embedded memory. The price will be reduced by the amount of the previously imposed levy, which equates to CDN$25 for 20GB and 40GB iPods, and $15 for iPod minis.
Credit Suisse First Boston has raised its target price for Apple stock to $70 from $40 and said it is expecting the company to sell nearly 5 million iPods this quarter. “We believe Apple will ship 4.8 million iPods in the December quarter and will once again exit the quarter with a substantial backlog, mostly in international locales,” the firm said. “This iPod number will fall short of some overly aggressive expectations mainly due to a shortage of hard drives, a problem that has plagued the company for over a year, but one we believe will finally be remedied in the calendar first quarter.”
Digimi Publishing today released “iPod + iTunes Quick Tips,” a new $5 eBook packed with “easy, concise and all-around cool tips meant to make your experience with Apple’s digital music duo more fun and more efficient.” The 59-page eBook has 100 tips (95 screenshots) and was written by Larry Angell (MacMinute Editor-in-Chief and iLounge News Editor) and Charles Starrett. The eBook was “written from a Mac-centric point of view, but Windows users should find more than enough tips to make purchasing worthwhile,” according to Digimi. iPod + iTunes Quick Tips shows you how to: receive Podcasts; save music videos and movie trailers from the iTMS; get the most out of your iPod’s battery; make normal AAC files bookmarkable and speed adjustable; be a better DJ with Party Shuffle; use the Firefox web browser to control iTunes; master Playlists and Smart Playlists; copy music from your iPod to your Mac; recover your lost iPod’s serial number; and much more.
Westciv, developers of the leading cross platform CSS Editor, Style Master, have released a special iPod edition of their popular CSS Guide. “Featuring a handy overview of CSS concepts, and in-depth information for every selector, property and @rule of CSS 2.1, the CSS podGuide is a must have for any web developer with an iPod.” The Style Master CSS podGuide is a free download.
The Wall Street Journal reports that major retailers are seeing iPod shortages across the country. The paper says that iPod minis and 20GB iPods are out of stock at Amazon.com, Buy.com and other Web sites, while retailers such as Target, J&R Electronics, and Best Buy are all having trouble keeping up with demand. “Given how strong demand has been all year you would have thought [Apple] would have gotten every last one they could into stores,” says Stephen Baker, director of industry analysis at market research firm NPD Group. “I suspect they have. It may just be they can’t build them fast enough.”
Apple’s iPod photo contains updated firmware that blocks songs downloaded from the RealNetworks music store from being played on the device, according to CNET News.com. “The move could render tunes purchased by many iPod owners unplayable on their music players. For the last four months, RealNetworks has marketed its music store as the only Apple rival compatible with the iPod, following the company’s discovery of a way to let its customers play their downloaded tunes on Apple’s MP3 player. Apple criticized RealNetworks’ workaround, dubbed Harmony, as the ‘tactics…of a hacker,’ and warned in July that RealNetworks-purchased songs would likely ‘cease to work with current and future iPods.’”
Toshiba today announced an 80GB version of its 1.8-inch hard drive that should eventually find its way into Apple’s iPod range. The company, which makes the drives found in current iPods, said the 80GB units would ship in the third quarter of 2005. “The Japanese manufacturer didn’t mention any customers by name of course, but having supplied Apple with micro hard drives to date, it seems likely the relationship will continue with the new, higher capacity,” reports The Register. A thinner and lighter version of the company’s 1.8” 40GB hard disk has also been introduced, and is likely to find its way into digital music players.
Toshiba has reportedly agreed to supply Apple with flash memory chips—presumably for the much-rumored flash iPod. China Daily reports that Yasuo Morimoto, senior executive vice president at Toshiba, has confirmed his company will start selling the memory chips to Apple “early next year.” Merrill Lynch analyst Steve Milunovich expects Apple to introduce a cheaper flash memory-based iPod at Macworld Expo in January. Toshiba currently supplies Apple with the 1.8-inch hard drives that the company uses in its 4G iPods.
At this week’s UBS Media Week Conference in New York, two executives took aim at Apple’s iPod. Andrew House, VP of Sony Computer Entertainment America, said he plans to first get the company’s Playstation Portable (PSP) in the hands of consumers as a gaming device and then use it to sell music and video downloads. The device uses a proprietary Sony storage disc format that can store about 2GB worth of content. “In the portable space, there are devices that are a necessity, like a cell phone, and there are devices that are indulgences,” House said. “The iPod fits very much into the indulgence and status category and that is where we are going to go head-to-head with PSP.”
Meanwhile, Warner Music Group CEO Edgar Bronfman said in a separate presentation at the conference that he sees a large opportunity to sell the label’s music on mobile phones, which he expects will hold as much as 1,000 songs like the iPod mini. “Eventually, the greatest competition [for the iPod] comes from the wireless network providers,” Bronfman said. “If my cell phone—or one of those 1.3 billion cell phone users as opposed to the five million iPod users—can give me the same kind of functionality as the iPod, that’s the biggest competition.”
In its annual report (SEC form 10-K) filed Friday with the Securities and Exchange Commission, Apple summarized several iPod and iTunes related details. The company said it sold a total of 4.4 million iPods in fiscal 2004, a 370 percent increase from the 939,000 iPods sold in fiscal 2003. Apple reported that net sales of iPods rose $961 million or 279 percent during fiscal 2004 compared to the previous year. Since it was first introduced in fiscal 2002, Apple has sold approximately 5.7 million iPods. Apple said net sales of other music products, which consists of sales associated with the iTunes Music Store and iPod related services and accessories, increased $242 million or 672 percent during fiscal 2004 compared to previous year.
“Strong demand for the iPods during fiscal 2004 continued to be experienced in all of the company’s operating segments and was driven by enhancements to the iPod, the introduction of the iPod mini, increased expansion of the iPod distribution network, and continued success of the iTunes Music Store due largely to making it available to both Macintosh and Windows users in the U.S., U.K., France and Germany,” Apple said in the filing.
In a move aimed squarely at iPod, Sony today introduced the NW-HD3 Network Walkman, its first hard disk-based player to support the popular MP3 song format. The 20GB device is the successor of Sony’s first hard disk Walkman (introduced earlier this year), which only supported the company’s proprietary Atrac file format. Sony claims that the NW-HD3, which now comes in four new colors, plays 2.5 times longer than the iPod on a single charge, and can hold several thousand more songs thanks to the Atrac compression. However, the new Walkman will sell for approximately 30 pounds more than the iPod. It will be available in the UK before Christmas at 249 pounds ($462.70) and elsewhere in Europe in early 2005 at 369 euros ($489). The NW-HD3 will also go on sale in Japan this month for around ¥42,000 ($408.76). There is no word yet on US plans.
Merrill Lynch analyst Steve Milunovich expects Apple to introduce a flash memory-based iPod in early 2005, possibly in January at Macworld Expo. In a research note obtained by iLounge, Milunovich said that he is looking for the new flash iPods to be priced in the $149 to $199 range. He notes that the flash MP3 market is five times the size of the hard drive player market in units and about two times its size in revenue. “This is a market Apple should want to participate in because it will pull new customers into the iPod/iTunes ecosystem,” Milunovich said. “We believe consumers will hesitate to switch once they become accustomed to the iPod’s scrollwheel or have purchased a number of iTunes (which only work on iPods). The land grab is on.”
Apple CEO Steve Jobs told the Los Angeles Times this week that the iPod’s popularity will endure because it’s more than just a pop culture icon. “I don’t think we’re seeing trendiness here,” Jobs said of the iPod. “I think we’re seeing a product that’s truly revolutionizing the way we listen to music. We didn’t sell 2 million of them last quarter because it’s trendy, we sold 2 million last quarter because it’s a phenomenal product that’s reinventing the way people enjoy music.”
Needham & Co. analyst Charles Wolf expects Apple to sell 13.3 million iPods in 2005 and an impressive 23.5 million iPods in 2006. He is also looking for 100 million Windows users to own iPods by 2008. In a research note to clients, Wolf said that a flash-based iPod could be “an opportunistic move to quickly capture an even higher share of the portable music player market.” He also suggests that iPod mini drive production costs could now have fallen by a third (the costs decline as yields increase, because overheads are spread across more units). “Apple should have sufficient margin to reduce the price of the mini from $249 to $199 once supply catches up with demand,” Wolf said.
Apple today released iPod Updater 2004-11-15, which includes iPod mini Software 1.2 for iPod mini and iPod software 3.0.2 for Click Wheel iPods. This update brings the following to iPod mini: compatibility with iTunes 4.7; the ability to create and delete multiple On-The-Go playlists; the ability to shuffle and play your song library with one click; an option to select reading playback speed for audiobooks; the ability to hear Click Wheel clicker through headphones; and improved disconnect performance when syncing. iPod Updater 2004-11-15 offers compatibility with iTunes 4.7 and improved USB 2.0 connectivity for Click Wheel iPods. Apple said this update contains the same software versions as iPod Updater 2004-10-20 for all other iPod models.
Apple’s iPod U2 Special Edition ($349.00) is now available for purchase in bricks-and-mortar Apple Stores, and iLounge has exclusive first pictures of the newest iPod’s packaging and pack-ins. Our full gallery will go up shortly, but for now, click on Read More for a collection of eleven shots to tide you over.
Shipments of the U2 iPod to fulfill Apple Store online pre-orders commenced several days ago, with anticipated delivery dates over the next several days. As noted in our earlier news stories and the iLounge Buyers’ Guide 2004, each U2 iPod includes a $50 coupon towards the purchase of The Complete U2, a digital box set of U2 music from iTunes, and a fold-out poster including photographs of the band. Other than its packaging, black casing, red Click Wheel and band-engraved back, the U2 iPod is the same as a 20GB fourth-generation iPod, and includes standard white accessories.
View the U2 iPod gallery
In an apparent attempt to unify its iPod product names, Apple has tweaked the name of its iPod Photo to iPod photo (lower case “p”). The product’s name now matches that of the iPod mini. Apple’s Web site appears to have been quietly made over to reflect the name change. According to readers, Apple resellers and members of the Apple Consultants Network received confirmation of the change from the company earlier today.
BusinessWeek’s Alex Salkever is expecting Apple to unveil a flash memory-based iPod that will hit shelves “sometime next year.” Salkever says the flash iPods would sell for significantly less than the current hard drive-based iPods, allowing Apple to reach new consumers who balk at the higher prices. “iPod, which clocked 3.2 million units sold in the last quarter, is logging an annual sales rate of roughly 13 million units. That leaves Apple plenty of room to maneuver if it wants to assault the flash player market… If Apple could sell just 5 million flash IPods in the next year at prices between $120 and $199, that would likely generate revenues of between $600 million and $1 billion. It would certainly push Apple closer to its goal of rejoining the $10 billion revenue club in the next two years. Add it all up, and the flash iPod hardly looks like a flash in the pan.”