iPod accessories added $14 million to Apple’s Q1 revenue | iLounge News

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iPod accessories added $14 million to Apple’s Q1 revenue

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By Dennis Lloyd

Publisher, iLounge
Published: Thursday, January 15, 2004
News Categories: Apple

MacMinute reports: “An estimated 733,000 iPods were sold, accounting for $256 million in revenue. This doesn’t include iPod accessories, which added up to another $14 million. Plus, the iPod numbers would have been even higher, but Apple’s supply couldn’t keep up with the demand, Anderson [Apple Chief Financial Officer] said.”

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Comments

41

How did this item turn into a support group for a few kiddies to complain about accessory prices? To propose that the manufacture of an iPod dock costs less than $1 is laughable on its face. The actual cost of production isn’t the issue. You may be a charity case, but why should Apple be your donor? This is business, not philanthropy, and the profitability of Apple is what ensures the continued production and distribution of supreme products such as the iPod - the existance of which is soley responsible for the site on which you post your sad story.

A.B. is right, if you don’t like the pricing, then speak with your wallet. (Of course, an empty wallet might not have much to say.)

Posted by JuliPod on January 16, 2004 at 3:07 AM (PDT)

42

I’m not accusing you (bobsyerunkle) of a blind a sheep just that Atomic Bomb kid commenting that i’m a “dolt”. I still stand by my comments.

I competely agree with you that if I don’t like it I shouldn’t buy it. Why is it wrong not to complain about the price of the iPod accessories? This is a business so yeah I agree that if Apple gets away with selling these items for that much go for it but i’ll voice my opinions with other apple users.

It took 2 classless people to get the attention of the battery replacement problem of the iPod. If no one speaks out about the price gauge of battery replacement do you think Apple would care to lower the price? While the accessories aren’t neccesities it’s still a high price for not so great items.

“Of course they’d seem outrageous to you if you are used to buying second-rate equipment or if you don’t have the money to spend.”
i’ve seen better looking/functional cases out there, and the apple remote is not so great. the dock only redeeming feature is the line out for me.

I’m sure i’m going to be accused of apple bashing or asked the question why i’m at an apple store by apple loyalist. I love my iPod. that’s the reason. I’m not going to yell at the people that do buy these accessories but I do question Apple’s pricing of accessories (people already complaining about the minipod’s price) I feel the classifies here at the forums is a better reflection of their prices.

bobsyerunkle - wouldn’t not buying and complaining be twice as effective?

Posted by Kenner on January 16, 2004 at 3:40 AM (PDT)

43

bobsyerunkle - wouldn’t not buying and complaining be twice as effective?

I wrote that have jokingly.

Posted by Kenner on January 16, 2004 at 3:42 AM (PDT)

44

bobsyerunkle - wouldn’t not buying and complaining be twice as effective? 
 
Can’t argue with that!

Posted by bobsyerunkle on January 16, 2004 at 3:59 AM (PDT)

45

The problem with Kenner’s justification of his complaining is that the “2 classless people” he referred to actually did something creative. Then after they got attention, they commented on how fair Apple’s new replacement policy was and also admitted to not knowing about the AppleCare or the third party options.

Unlike them, kenner and the like just repeatedly moan about the pricing with little logic or reason in their moaning. Atomic is spot on and is definitely more reasonable about the whole thing. I just wish this perpetual discussion would end! I mean, $14 million of accessory revenue clearly shows that the pricing works and that there are plenty of people out there who think these products are a good value.

Posted by JakeSnake on January 16, 2004 at 4:54 AM (PDT)

46

“Then after they got attention, they commented on how fair Apple’s new replacement policy was and also admitted to not knowing about the AppleCare or the third party options”
umm. I did all my research before buying my iPod.
So should I dress up as a life size case and do a little dance before someone takes my point seriously.

I saw the news info and commented that it seems fairly expensive for the things that you get. All the respect for apple if they can get away with the stuff i’m just commenting that I don’t agree with them.

Like I said. $40 for the apple case. I guess that’s my whole argument here. tongue wink

Seriously, what’s wrong about complaining about the price here? I’m not frugal. If I was I wouldn’t be listening to my iPod now and wouldn’t die from starvation from losing $35 bucks. it’s just that I don’t find the accessories very reasonable.

My apologies for voicing my opinion. I just felt strongly about it, but I should stop posting here about Apple.

Posted by Kenner on January 16, 2004 at 5:30 AM (PDT)

47

high price was worth the product, imo

it’s not that hard to spend your money in other places and move on with your life.

i love watching these types of arguements. they are really entertaining!

Posted by Fiddytree on January 16, 2004 at 6:51 AM (PDT)

48

So at what price would the prices be “outrageous”?  $100 for a dock?  $250?  $1000?  By your arguments, there would be no price that’s “outrageous”.

Posted by Albert on January 16, 2004 at 8:52 AM (PDT)

49

Perhaps an outrageous price would be one at which demand decreases to a point lower than the supply achieved through reasonable production cycles. As the pricing currently stands, Apple is easily selling every accessory it makes. That being the case, there is little reason to decrease the price. Were the price too high, then the demand for the products would reflect that (customers not buying them) and Apple would be forced to reduce the price in order to relieve inventories.

Posted by Atomic Bomb in Mid-Atlantic on January 16, 2004 at 9:10 AM (PDT)

50

How do you know they are selling every accessory they make?

Posted by Albert on January 16, 2004 at 9:14 AM (PDT)

51

This is all Product Sales 101. Any time the price for a given product goes up, the demand decreases, and as the price for that product goes down, the demand increases (both with few theoretic exceptions based on concepts such as ‘perceived value’). That’s where the term “clearance sale” came from. A clearance sale is a situation in which the price for a product is reduced to the point that demand far outstrips supply - and therefore clears it out.

It is reasonable to assume that a $100 or $250 or $1000 dock would have a significantly lower demand than that generated by the current price for the dock. Naturally, were Apple to sell the dock for $10, they would sell more of them but at a reduced margin. The idea is to achieve a balance between volume and margin that will optimize profits. Apple is notoriously good at this. As their industry leading profit margin demonstrates.

Posted by Atomic Bomb in Mid-Atlantic on January 16, 2004 at 9:16 AM (PDT)

52

Ummmm… yeah. Okay. Well, I think the accessories tend to be overpriced by about $10-$15. I know by now to expect higher prices out of Apple anyway… and I was fully aware of the cost of the accessories from the start.

If it’s too expensive, don’t buy it, right? Right. The Vaja iVod (which of course is a third party accessory) is, in my opinion, overpriced at $65+. $50 is more reasonable, with the sale and all, but the shipping is just too expensive, even if it is coming from Argentina. So what did I do? I didn’t buy one. It was very easy not to buy it, I didn’t have to do anything at all. Now Apple carries the iVod on their website, with much more reasonable shipping. The price was right, and I bought one. Simple.

What I don’t understand is why some of you are so bitter. Some of you are just really, really bitter. It’s not like food or anything, and Apple is endangering your life by overpricing their products. If you have bought an accessory, and feel ripped off, why not just return it for a refund? Apple isn’t a charity in any case. It isn’t thier duty to price things particularly low so everyone feels that they can afford them, or that everyone feels they are getting a good value. They aren’t obligated, as far as pricing goes, to anyone but themselves.

To make the point that one feels the accessories is overpriced is fine, obviously. But this anger, I don’t understand it.

Posted by monkedsel on January 16, 2004 at 9:24 AM (PDT)

53

Your simple supply/demand pricing model assumes rational consumers. Maybe your community college Econ 101 didn’t cover luxury pricing, such as Coco Chanel’s famous decision to massively raise the prices on her fragrances across the board, against the advice of her executives. This strategy worked and her scents were then distinguished from their competitors by their high prices - gross margins improved dramatically. The experience of Harley in the 1980s also illustrated this model. By deliberately restricting supply, they tripled the entry price for their product and laughed all the way to the bank.

Coco knew that when it comes to pricing luxuries instead of commodities then different forces come in to play: ego, vanity, and status. These psychological influences definitely play a role in the pricing of the iPod platform and of its associated peripherals. 3rd party suppliers figure if people have already paid $499 for a music player, they might pay $50 instead of $10 for an associated peripheral.

The essential component to taking advantage of ego, vanity, and status is marketing - and of course Apple’s religious-like marketing over the years has always maximized their return from this strategy.

Posted by Coco on January 16, 2004 at 9:24 AM (PDT)

54

atomic bomb stop being such a nazi - im entitled to my own opinion - i feel the accessories are expensive - just like the mats and accessories on my 330 ci - and thats at a much larger scale - some people do take price in account - point being - maybe if they hear [the evil white empire ie apple] a good amount of people gripe about the price they will take notice and drop it a bit - happy?  and it looks like they are listening to that for the overly priced mini ipod.  - i love u

Posted by gabe on January 16, 2004 at 12:18 PM (PDT)

55

Coco: That’s the ‘perceived value’ bit that I mentioned.  Your point is very well put. In both cases, customer base played a roll. Were Apple’s customer base - and by extension their supply chain - much larger, their prices would likely be lower to begin with. Obviously, demand modelling is a complex science.

The bigger point is that companies listen to profits and paying customers who communicate with them directly - not ######## and moaning on some unrelated web site by anonymous posters.

Posted by Atomic Bomb in Mid-Atlantic on January 16, 2004 at 12:24 PM (PDT)

56

Atomic Bomb , you have the immature idologies.

What do you do? Have your mommy and daddy buy everything for ya?

Posted by Bob on January 16, 2004 at 6:29 PM (PDT)

57

Hehe, M3 is for the guys who cannot afford a E39 M5. 

Atomic Bomb, I can take you for a spin any time.

Posted by Cars on January 21, 2004 at 5:26 AM (PDT)

58

Apple stuff isn’t the Honda or Toyota of the world, its not even Mercedes Benz or BMW, its more Bentley Porsche Ferrari

now people who buy the bugdet cars complain about value for money, but do you think the guy who buys a Ferrari Enzo for half a million complains that compared to the guy that paid 50 thou, he gets a lot less? NO! because he likes the product and has the money to afford it, if you want somehting cheaper or can’t afford it get something else. 

besides if you saw the wholesale prices of this stuff, you lot would realize that the markup on each of these things is tiny…

Posted by alexius on March 17, 2005 at 4:31 AM (PDT)

59

Apple stuff isn’t the Honda or Toyota of the world, its not even Mercedes Benz or BMW, its more Bentley Porsche Ferrari

now people who buy the bugdet cars complain about value for money, but do you think the guy who buys a Ferrari Enzo for half a million complains that compared to the guy that paid 50 thou, he gets a lot less? NO! because he likes the product and has the money to afford it, if you want somehting cheaper or can’t afford it get something else. 

plus check out the profit margins that the resellers are making, tiny, the wholesale prices are actually very very close to what the retail price is, people are making less than 10 percent, all this tells you is that lots of people are buying lots of accessories

Posted by alexius on March 17, 2005 at 4:33 AM (PDT)

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