Merrill Lynch analyst Steven Milunovich says he now expects Apple to sell 4.5 million iPods this quarter and 20 million for the year. Milunovich was previously looking for the company to sell 4 million devices in the March quarter. “Although iPod competition is strengthening, we believe demand for the iPod shuffle continues to outstrip supply,” Milunovich says in a research note obtained by iLounge.
Milunovich also said that digital music subscription services do not appear to be an immediate threat to iTunes. “We believe Napster’s results show that online music purchases continue to grow. We do not see the small rise in absolute number of subscribers (now at 270,000) as taking share from Apple’s iTunes,” he says.
A stand-alone iPod store has opened up in San Luis Obispo, California. Shane Williams, owner of the iPod Shop, said it’s the first such store in the country. “We were originally selling the iPods out of our Mac store [the Mac Superstore in San Luis Obispo], and when they became all the rage, we found that we didn’t have enough room for them and all of their accessories,” Williams said. The iPod Shop, which averages about $4,000 per day in revenue, offers 14 iPod models, more than 100 accessories, and “a comfortable chair in the middle of the room to listening stations along the walls.”
A recent consumer survey found that the average iPod owner in the U.S. spends about $150 on accessories—on average half of the value of the device. The study by market research firm Envisioneering Group averaged the price of an iPod at $300 and was taken before the introduction of the iPod shuffle.
“This is an amazing uptick in iPod accessory sales and it doesn’t appear to be slowing down,” Richard Doherty, research director at the Envisioneering Group, told the Mac Observer. “The iPod is a different phenomenon among electronic products. Music is a reflection of our soul and the iPod is becoming an emotional extension of people.”
Doherty said iPod accessory sales could go higher than $150 per device sometime in 2005. “I don’t think you’ll see the average hit 200% of each average iPod sold of $300, but it will creep up a little,” he said. “Demand will stay strong, for sure.”
PortalPlayer, which makes the chips that power all current hard drive-based iPods, today disclosed details of its next-generation PP5022 chip for portable digital media players. The PP5022 improves upon the current PP5020 chip, offering “up to triple the battery life” thanks to better power consumption. It should be noted, however, that many factors such as LCDs, hard disks, and other integrated components will have a significant impact on battery life. Currently, the 4G iPod offers 12 hours of playback time; the iPod photo 15-17 hours; and the iPod mini 18-26 hours. The PP5022 also builds on the multimedia capabilities of the 5020, with support for video playback and, like the iPod photo’s TV slideshow features, dual-screened control of video: a menu could be on the portable screen while video clips play on your TV.
In a related announcement, PortalPlayer introduced the PP5024 chip, a more limited processor intended for high-capacity flash memory-based music players. In future generations of the iPod shuffle, the PP5024 could eventually replace the SigmaTel processor Apple currently uses. There is currently no clear reason to make such a switch, however.
Piper Jaffray analyst Gene Munster says Apple’s announcement today that it has sold more than 300 million tracks from the iTunes Music Store means that the daily average of downloads has held steady following a holiday uptick. In a research note to clients, Munster said the average per day since January is approximately 1.35 million downloads, in-line with the 1.43 million average after the holidays. “We had been anticipating a more significant drop off in iTunes sales from the levels seen in the weeks following the holidays,” he said, noting that iTunes sales have exceeded his estimate for the March quarter.
Synergy Creations has announced the release of PeriodicPod 1.0, new educational chemistry software for the iPod. PeriodicPod, which works with third and fourth-generation iPods, gives you quick access to atomic properties. “Due to the limitations of the current iPod screen and interface, PeriodicPod is a reference tool rather than a visualization tool like our Periodic Table software,” the developer explained. PeriodicPod is $9 shareware.
The Wall Street Journal’s Jim Carlton writes with the following request:
“I am finishing up a story on how folks are using more computer gadgets these days while on vacation. I’d like to include iPod users in this story, and in particular am looking for someone who has used an iPod while on vacation for something unusual - like listening to a book on tape, or learning to speak French, rather than for just listening to music. If anyone has a story to share, please email me at: [link deleted]. My deadline is the next couple of days, and I’d ask that you include name/age/occupation/hometown, and details such as when and where you took the vacation. I’d be sure to email you copy of story once it is published. Thanks again.”
iLounge just might have someone reading who fits the description. If it’s you, please use the link above to e-mail Jim.
Update: Jim received so many responses in the first five minutes of the news story’s posting that he’s overwhelmed. Thanks to all who responded!
Synaptics has confirmed that its touchpad technology is used in the latest iPod photo and iPod mini models, putting to rest speculation that Apple would develop its own iPod touchpad interface using Cypress Semiconductor chips. “Yesterday Apple announced several new iPods and we are confirming that our interface solutions are being used in those products,” Synaptics said in a Securities and Exchange Commission filing this week. “As has been the case since our initial product introductions in fiscal 1996, we compete for designs on a product by product basis and have no assurances from any of our OEM customers that they will utilize our interface solutions in any of their future products.” Rumors first started to swirl when it was revealed earlier this month that Apple partnered with Cypress for the innovative touchpad on the latest PowerBook revision.
In releasing newly affordable iPod photo hardware, Apple Computer has changed the product’s packaging to a thinner and highly attractive black and metal foiled design. Metal foil is used for the box’s front text, while an all-black matte background highlights the metallic luster.
The new packaging, which you can see more fully with the Read More button below, dramatically de-emphasizes the word “photo” on its front, reducing it to a tiny badge underneath the letters “PC.” This contrasts markedly with Apple’s new iPod mini packaging, which continues to grant the word “mini” equal prominence with the iPod name.
In addition to its revamped iPod photo lineup, Apple today also announced the Camera Connector accessory, which gives users the ability to import photos directly from their digital camera for instant viewing and slide show playback on the devices. Apple did not give any further information or image of the iPod add-on except to say that it will ship in late March for $29.
Greg Joswiak, vice president of hardware marketing at Apple, revealed further details of the Camera Connector in an interview with CNET News.com. He said that it is a small white plastic device that is similar to a small docking station with a cable for connecting to the iPod and a USB port for connecting to a camera. Joswiak noted that pictures loaded onto an iPod photo directly from the Camera Connector will be able to be viewed immediately on the device. However, in order for the photos to be shown on a TV, the iPod Photo will need to be connected to a computer first.
Update: At an Apple press event in Japan to introduce the new iPod models, a presentation slide revealed what the new iPod Camera Connector will look like (see above-right).
This morning’s iPod updates will “widen the gap between Apple and potential competition,” Piper Jaffray analyst Gene Munster said today. “We believe some will view the changes in the iPod product line as negative. Specifically, we expect to hear arguments that Apple is taking a hit to margins in reaction to competitive threats,” Munster wrote in a research note to clients obtained by iLounge. “We believe that Apple’s changes to the product line are more offensive than defensive. Apple clearly holds the leadership position on this market and we believe these changes will widen the gap between Apple and potential competitors that are trying to chip away at iPod market share.”
Apple has posted iPod Updater 2005-02-22, which includes updated versions of the software for use with various iPod models. According to the release notes, the update includes new software for the iPod mini (v1.3), iPod with Dock Connector (v2.3), iPod shuffle (v1.1), and iPod with Touch Wheel or Scroll Wheel (v1.5).
The iPod mini software update adds support for the newly introduced models and adds support for charging and syncing over USB with Mac OS X v10.2.8 or 10.3.4 or later.
The iPod shuffle software update adds support for the iPod shuffle Battery Pack and offers “increased software stability.”
The iPod software update for those devices with Dock Connectors, Touch Wheels or Scroll Wheels brings the Shuffle Songs and Music items into the Main Menu, and adds support for iTunes 4.7 or later.
Editors’ Note: Trivia buffs may be interested to know that Apple’s new 4GB and 6GB iPod minis come with an earlier “new” version of the iPod Updater, dated 2005-02-07, which differs from the company’s January 11, 2005 Updater only in that it contains version 1.3 of the iPod mini software. Was the 6GB iPod mini originally planned for release less than one month after the iPod shuffle?
In addition to updated iPod minis, Apple today announced a revamped iPod photo family, including a new “slim” 30GB model for $349 and a 60GB model for $449 - a $150 price drop from its previous level. Apple’s 30GB model loses 10 Gigabytes, $150, 0.5 ounces of weight and 0.12” thickness from the earlier 40GB iPod photo, while the 60GB model remains the same size. Both the 30GB and 60GB iPod photos are available immediately. Apple is also promising updated iPod photo software for a March release to include “new slideshow transitions” that can be picked “on the go.”
Both of the new models feature the ability to import photos directly from your digital camera via an optional new iPod Camera Connector for instant viewing and slide show playback on iPod photo. The Connector is expected to be available in late March for $29.
The new iPod photo models no longer include iPod photo Docks, iPod photo AV cables, or cases, and more surprisingly, Apple has also apparently dropped both FireWire cables and FireWire Power Adapters from the iPod photo boxes. Each iPod photo now includes only a single USB 2.0 cable and a USB Power Adapter, recently reviewed on iLounge, for wall power charging. Each of the other items is available separately.
On a related note, Apple has discontinued the 40GB fourth-generation iPod (previously $399) and the 40GB iPod photo ($499). The fourth-generation 20GB iPod remains at a $299 price point.
As more and more digital music players get color screens, companies will be adding more integrated photo capabilities, including the ability to connect directly with cameras and printers, according to Gary Johnson, CEO of PortalPlayer, which makes the chip that powers the hard drive-based iPods.
“There are already plenty of MP3 players on the market, including Apple’s iPod photo, that can show digital photos while playing music,” reports CNET News.com. “But soon, we are likely to see music devices that can download and display pictures directly, without using a computer as a go-between… Johnson was careful not to say whether it will be Apple’s player that does this, though. An Apple representative declined to comment.”
A recent job posting from Apple on Gamasutra, a recruiting site for the game industry, suggests that the company may be ready to expand the iPod’s bundled games. The posting seeks a programmer with “experience working with embedded systems” who would in part be “responsible for rapidly developing memory and performance optimized software solutions to complex problems.” The optional qualifications for the position include “ARM7 RISC processor experience,” “Flash [game] experience” and “2D or 3D graphics programming” knowledge.
Apple plans to introduce an iPod or accessory with Bluetooth wireless technology, according to Bogdan Nedelcu, automotive product manager at Motorola. In an interview on radio station France Info, Nedelcou reportedly said that Motorola is close to releasing a system that allows users to listen to music from their iPod through their car stereo speakers. He also said that users will be able to have hands-free conversations with their mobile phone through their car speakers.
At the DEMO@15! conference in Scottsdale, Arizona earlier this month, Motorola showed off a forthcoming product called “iRadio.” According to the company, iRadio will “mobilize hundreds of commercial-free Internet radio channels and your personal music collection, letting you enjoy your favorite genres, artists, and tunes whether at home, in the car, or on the go.” Motorola went on to state that the service “uses a high-speed Internet connection, Bluetooth technology, and a mobile phone to offer listeners a continuous entertainment experience—you can start a song on your car radio at exactly the point where you stopped it on your living room stereo.”
iRadio is planned for launch “later this year.”
The official website of well-known chef Emeril LaGasse now has a “Pod Stuff” section highlighting three new iPod software titles that will soon be available as free downloads.
mFinder 1.0 - “Now can you have Emeril’s restaurant information in the palm of your hand. You’ll find addresses, phone numbers, hours, management, attire and parking for all of the restaurants in five different cities!”
podMeals 1.0 - “Now can you have EMERILS.COM weekly menus in the palm of your hand. Jamming to tunes in the grocery and can’t think of what to make for dinner - check your Apple iPod for podMeals!”
ReciPods 1.0 - “10,000 songs in your pocket? Big deal! How about 1,000 Emeril recipes in your pocket? Go home, put on some tunes and create a little love and magic in the kitchen!”
There’s no word on when they will be released.
Microsoft co-founder and chairman Bill Gates said Wednesday that while the iPod has been “a great success,” he doesn’t use the Apple music player and doubts claims made earlier this month that the majority of his employees are iPod owners.
In an interview with ABC News anchor Peter Jennings, Gates said: “I’m not an iPod user. I use the Creative Zen which is a fantastic product. That’s another space where, even what we have today, whether it’s iPod or the other things are only the start of what we’re gonna have in a few years. People are gonna want choices. These things are going to be smaller or better, cheaper.”
When asked about a recent Wired News article that reported about 80 percent of Microsoft employees who own a digital music player own an iPod, Gates said: “Well, I doubt that’s the case. Certainly, the iPod’s a great success.”
Gates went on to say that Apple “did a great job” with the iPod, but “what Apple’s done there is typically what they do.” He said: “It’s only their one music store, only their device. What we’re doing is providing choices.”
A recent study by the Pew Internet & American Life Project found that more than 22 million U.S. adults—11% of the population—have digital music players such as Apple’s iPod. “It’s safe to say that there are several million more MP3 players owned in the teen world, but we did not survey teens in this poll,” explained Pew’s Lee Rainie.
According to the survey, men (14%) are more likely to have MP3 players than women (9%). Nearly one in five (19%) under the age of 30 have the devices, while 14% of those ages 30-39 have them and 14% of those ages 40-48.
The study also found that portable music players are more common with those with a higher income, internet users, and broadband customers. A quarter (24%) of those earning more than $75,000 a year have them. And those who use the internet are four times (15%) as likely as non-internet users (4%) to be MP3 player owners. Finally, the Pew survey reported that some 23% of those with broadband at home have the devices, compared to 9% of those who have dial-up.
The nationwide phone survey was taken between January 13 and February 9 and involved 2,200 people.
Apple has sold more than 10 million iPods since its introduction in 2001.
Mel Karmazin, CEO of Sirius Satellite Radio, said he recently spoke with Apple CEO Steve Jobs about adding satellite radio to the iPod, but that there is no plan for such a partnership.
“I’ve spoken to Steve Jobs,” Karmazin said Wednesday at a media conference in New York. He declined to elaborate, other than to say that the “current thinking” at Apple is that “they don’t need to put a satellite radio in their box.”
Karmazin said Sirius has been talking to many potential partners about integrating its satellite radio technology.