MacMinute reports on a story published at SiliconeValley.com describing Apple’s strategy to sell more iPods while making less profits overall.
“In the coming months, Apple will begin to unfurl its strategy of making a little less profit on the average iPod, but selling a lot more of them. A Hewlett-Packard branded version of the iPod is due in a few weeks, and HP will pocket some of the profit from that version. The new iPod mini will bring Apple less profit per sale than previous iPod models, because its parts make up a larger portion of its $249 price tag.
Success for Apple will mean selling so many of the music players that the slimmer profits don’t matter, and paying lower prices for the iPod’s building blocks. Apple will begin to show success or failure in the spring”