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Analysts weigh in on Apple announcements

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By LC Angell

Contributing Editor
Published: Wednesday, March 1, 2006
News Categories: Apple

The consensus among tech analysts is that Apple’s new iPod Hi-Fi and updated Mac minis bring the company closer to the center of the digital living room, but also show that Apple is not afraid of alienating iPod accessory makers.

“Both these products are a way to get more people slowly hooked into the Apple brand in the living room, sort of like what Sony did in its heyday,” said Sam Bhavnani, an analyst at research firm Current Analysis.

Needham & Company analyst Charlie Wolf said he thinks the announcements are “just the start” of Apple’s digital home strategy. “It’s still a little computer, but it’s adding a lot of capabilities that will allow it to morph into an entertainment center in the living room,” said Wolf.

“Apple is taking steps to move their brand to other rooms beyond just the Mac,” said analyst Tim Bajarin of research firm Creative Strategies of the Hi-Fi. “It’s no longer just sitting in the den.”

“I think they are going straight at the ultimate goal of digital convergence,” Lehman Brothers analyst Harry Blount commented. “Apple already has a powerful media portal on the Internet and they need to extent the virtual portal into your living room.” Blount said Apple “stills need to do more work on the boom box,” referring to the iPod Hi-Fi. “That is where I wasn’t blown away.”

Merrill Lynch analyst Richard Farmer wonders if the two products required a special event, and if they’re both too overpriced. In a research note provided to iLounge, he said that Apple “needs to be judicious if it expects to continue to convert journalists into marketing instruments with its aura of secrecy.” Farmer also said that high pricing for the Hi-Fi and new leather iPod cases suggests Apple “believes it can position its accessories at a premium to competing alternatives.”

“The price point and form factor are likely to appeal to people who are younger and have less disposable income, and who are making their first home stereo purchase,” said IDC analyst Susan Kevorkian. “It’s less likely to appeal to people who have a home entertainment system.”

Rob Enderle, principal analyst for the Enderle Group, said that iPod accessory makers should be wary of Apple’s major new entrance into the iPod add-on ecosystem. “If you’re an iPod accessories maker, (Tuesday’s) announcement has to make you nervous,” said Enderle. “The accessories market is clearly very lucrative, and Apple will be getting more aggressive.”

“I was surprised when I saw that Apple was releasing another major iPod accessory,” said Technology Business Research senior analyst Tim Deal, noting the release of the iPod Radio Remote earlier this year. “This sends a clear message to iPod developers and I’m sure it will breed some ill will.”

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Comments

1

I don’t know why they think everyone is going to be scared because Apple is getting into the accessories business. I mean, did Griffin feel ill will when Belkin started making iPod accessories? (or vice versa) If you make excellent accessories that work well and are well-designed you shouldn’t have anything to worry about. If you make junk, well, you’re probably in the wrong market.

Posted by tracy on March 1, 2006 at 10:38 AM (PDT)

2

Analysts.  pfffft.  The Mac mini has been priced out of the temptation zone and into the “well, this is real money now” zone.

Posted by stark23x on March 1, 2006 at 11:43 AM (PDT)

3

If 3rd Party manufacturers actually manufacturers Innovative Accessories, instead of regurgitating the next big thing with their own logo, maybe Apple wouldn’t have to release things like the Boom Box (sorry, Lo-Fi… sorry “Hi-Fi”).
Apple have supplied a concept device for the 3rd Party manufacturers to capitalise on and improve.
Flush-mount the iPod so the BoomBox can be carried with the iPod in it, Redesign the case for better acoustics, provide it at a realistic price point, add an FM tuner which utilises the iPod’s FM Tuner Interface. The “Hi-Fi” is pretty lame, and definitely can be improved on.

Posted by Salvo on March 1, 2006 at 12:32 PM (PDT)

4

Why anyone still puts stock in what Rob Enderle says is beyond me…

Posted by Moe on March 1, 2006 at 12:40 PM (PDT)

5

Sony had a heyday?

(okay, I’ll play nice…but I really don’t wanna)

Posted by flatline response on March 2, 2006 at 2:50 AM (PDT)

6

Apple should put Airport Express into the Hi-Fi, and also an internal hard drive

Posted by hoho on March 2, 2006 at 6:04 AM (PDT)

7

What’s the point of having Airport Express with an internal hard drive ??? Airport Express is using Mac hard drive,no need to have an internal one !

Airport Express should have a screen to display track name and cover like the slim devices Squeezebox, maybe also a remote.

Posted by Steph on March 2, 2006 at 7:56 AM (PDT)

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