Analysts: New iPods priced for profits, not market share | iLounge News

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Analysts: New iPods priced for profits, not market share

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By LC Angell

Contributing Editor
Published: Monday, September 18, 2006
News Categories: Apple

Apple’s pricing of the new iPod models shows the company is looking for better profit margins and not market share gains, according to analysts at market researcher Gartner. The analysts said the second-generation iPod shuffle could have been priced closer to $49, since the cost of materials amounts to around $30. Similarly, Apple could have also priced its new iPod nano models cheaper, according to the analysts. They claim the 8GB model has $130 in materials, the 4GB has $90 worth of materials, and the 2GB version has only $70 in materials. “Apple is in a secure position atop the portable media player market and has decided to strategically focus on its margin this time,” the analysts said.

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Comments

1

OMG the great Steve Jobs shows his true colors… And u all thought he is anti-establishment.

Posted by John Stevens on September 18, 2006 at 9:51 AM (PDT)

2

Well, there’s all those shareholder lawsuits and SEC fines to consider…have to build up the ol’ warchest for those rainy daze, y’know…

Posted by flatline response on September 18, 2006 at 9:55 AM (PDT)

3

the cost of materials is not the total cost of the product. you have to ship the materials to the factories, and ship the ipods to the stores. and gas does cost money. as do advertising campaigns and paying people to work in apple stores.

Posted by jm on September 18, 2006 at 10:04 AM (PDT)

4

jm…yes, but those things haven’t changed that much from previous gen ipods.  you can compare cost vs. cost to see if profit margin went up, which apparently it has.

Posted by OnlyShawn on September 18, 2006 at 10:08 AM (PDT)

5

I remember when the mini came out and people wanted to buy them just for the 4 GB hard drive, which cost more at that time than the mini. Now Apple has monopoly pricing power.

Posted by brted on September 18, 2006 at 10:14 AM (PDT)

6

At this point it’s the wholesale, not retail price that matters. The Zune competes with the iPod 30 gb, which has lowered the price and is forcing MS to reevaluate the sometime-Zune price point. Apple’s other iPods allow enough margins for stores to actually push the iPod over the Zune, taking away one of MS’s threats against Apple.

Posted by mainmac on September 18, 2006 at 10:47 AM (PDT)

7

Wow, a company trying to make money…....how unusual.

Just be glad they dont have the pricing structure of the gas companies.

Posted by unreal on September 18, 2006 at 10:53 AM (PDT)

8

I don’t mind any company trying to make a buck here and there, but their ‘european’ pricing policy took away any interest I had in upgrading mine.  I have no problem forking down 349 euros for the 80Gig, even though that’s already a very reasonable mark-up compared to US$349 (just like when I bought my 20Gig 3g 3 years ago) ... but they’re priced at 399 euros over here in Belgium (and some other european countries)?!?  Besides that, the price varies by country, they go as ‘low’ as 379 euros in Germany for example.

Higher transportation costs, general pricing upgrades (next gen consoles, anyone wink and local taxes only account for so much…how can they justify this increase? Shipping them in business class, maybe its (internally) solid gold plated, or maybe they had to consider the extra man hours that go into capping the volume wink

But hey, I’m sure this won’t prevent them making a killing on the european market, as they’re the only one so far to offer the extended capacity, and the Zune doesn’t look THAT convincing that it would replace the iPod anytime soon.

Just my 2 cents (or does ilounge charge their european visitors more as well wink

Posted by lyrical on September 18, 2006 at 11:46 AM (PDT)

9

Just goes to show ya that there will be a better time for iPod buying in the future hopefully the wide-touchscreened iPod.

Posted by juano on September 18, 2006 at 1:46 PM (PDT)

10

To lyrical:

I guess uniform pricing is a benefit of corporate hegemony in the United States.  That and relaxed enforcement of anti-trust laws.

349 euros is a lot more than US$349.  It’s probably cheaper to order an iPod from the States, even including shipping and handling and any import taxes/currency conversions.

Posted by LawLaw Land on September 18, 2006 at 1:52 PM (PDT)

11

The 80GB one here in the UK is priced at £259 (around 383 euros) seems fairly reasonable to me, considering I paid around that a few years ago for my 3G 20GB one. Admittedly that was when they came with the dock, remote control and mains adaptor all included in the box.

Apple is a business, they make money, they don’t do it just for fun.

Posted by Gatéz on September 18, 2006 at 2:30 PM (PDT)

12

“OMG the great Steve Jobs shows his true colors… And u all thought he is anti-establishment.”

What? He is the boss of a big buisness of course he isent anti-esablisment

Someone make a picture of Steve with a red background like the Che Guvara picture raspberry

Posted by Peachey on September 18, 2006 at 2:44 PM (PDT)

13

quote from unreal “Wow, a company trying to make money…....how unusual.

Just be glad they dont have the pricing structure of the gas companies.”

That would be so crazy, imagine the news report…..
And today in other news a truck carrying 50,000 ipods overturned in Illinois today instantly causing the price of Ipods all of the world to increase by 30%. This increase in prices is expected to last only a month or so and then go back down unlike the big Chinese Ipod frenzy of 2007 which caused Ipods to increase to $500 each and never come back down. And now the weather…

Posted by ferris209 on September 18, 2006 at 2:55 PM (PDT)

14

they could have easily released a 10GB Nano for $249, just as many analysts predicted. I think Apple is going to do that at the Mac Expo + makes all nano’s available in black and silver (maybe even in all colors for the entire nano line)

Posted by mike on September 18, 2006 at 5:25 PM (PDT)

15

quote… “Wow, a company trying to make money…....how unusual.”

Microsoft=A company trying to make money. 

LOL. Steve Job Apologists rule!  NOT.

Posted by Sig420 on September 18, 2006 at 8:03 PM (PDT)

16

Wait a few months and we’ll probably get much more flash memory (12-15g?)for 250 clams.  Current nano situation is a straight up cash grab which really sucks because the product is so unbelievable

Posted by JSteeza on September 20, 2006 at 4:48 AM (PDT)

17

wow…I’ve never owned an ipod AND I’M STILL ALIVE!
imagine a world attempting to profit off of YOU and you not only allow it, but actively support victimization….imagine.

Posted by maybei'mretarded on October 31, 2006 at 12:43 AM (PDT)

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