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Business Week: A maxiPrice for Apple's miniPod

updated 11:50 am EST, Thu January 8, 2004

maxiPrice for miniPod

Echoing industry concerns over the price of the iPod mini, Business Week Online to the ill-fated Power Mac Cube: "But even Jobs is subject to fits of delusion from time to time. Apple's ill-fated Cube desktop computer is the prime example. The cute blue PC in the shape of a small cube won design awards but failed to spark sales and has since been relegated to the role of novelty item on eBay.... [The 'miniPod'] Less music in a device marginally smaller at about the same price. Get it? I didn't, and few others will, either." The article notes that the iPod mini is almost 50% smaller in terms of total volume and weighs half as much.

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01/08, 11:58am | report spam | close Reply |
Blue Cube????

Since when was the G4 Cube ever blue?

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01/08, 11:59am | report spam | close Reply |
Classic Apple blundering

This is so apropos it's hilarious. Apple always applies the "boutique" treatment to it's much anticipated "low-end" products and effectively eliminates the high volume sales potential of the product. Why they didn't just put a smaller drive into the current iPod (which is plenty small enough) and charge $149 for it I don't know. They would have killed ALL competition including sales of personal CD players.

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01/08, 12:02pm | report spam | close Reply |
Gimme a break

Does it escape all these geniuses that Rio introduced essentially the SAME device but BIGGER (4GB) at the SAME price point? Braintrusts.

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01/08, 12:10pm | report spam | close Reply |
$199 Sweet Spot

$199 would have been the sweet spot, pricewise. I could see getting one just for file transfers at that price.

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01/08, 12:12pm | report spam | close Reply |
*cough*confusion*cough*

"Does it escape all these geniuses that Rio introduced essentially the SAME device but BIGGER (4GB)"
Um...I thought the iPod Mini was 4GB? How exactly is 4 GB bigger than 4 GB? :)

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01/08, 12:13pm | report spam | close Reply |
Influence

How can anyone predict poor sales in such a public fashion without influencing the outcome to some extent? I think Apple wil sell a zillion of the mini iPods to teen and 20-something girls that will love the small size and cute colors.

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01/08, 12:18pm | report spam | close Reply |
Remember the rants

Remember how people complained that Apple should only charge 25 cents per song on iTMS or it would be doomed to failure?

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01/08, 12:19pm | report spam | close Reply |
What he should have done.

$200 256MB Creative Labs MuVo 256MB
$200 256MB Philips PSA 256MAX
$200 256MB Rio Chiba
$220 1.5GB Rio Nitrus
$250 1.5GB iRiver iGP-100
$350 4.0GB Creative Labs MuVo2
$269 512MB Creative Labs MuVo2 X-Trainer
$499 1.0GB Creative Labs MuVo2 X-Trainer

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01/08, 12:24pm | report spam | close Reply |
Rants

What, a journalist writing what other Mac users have been saying as well is now called ranting? Calm down zealots, you would be more for this device if only Steve asked you to.

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01/08, 12:35pm | report spam | close Reply |
price

Um... the drive Apple is using (from Hitachi) had a retail price of $499 up to 1 month ago (I have no idea what it retails for now though). Now we all know that Apple didn't pay retail for the drive but how much do you think they got the drive for?
I think its pretty amazing they got the price down that low, but I agree that $199 would have been a sweet price point.

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01/08, 12:36pm | report spam | close Reply |
Blue Cube?

"The cute blue PC..." This reporter should do some research.

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01/08, 12:37pm | report spam | close Reply |
Re: confusion

Umm, I think he was trying to say it was the same HD size, but a bigger physical size device.

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01/08, 12:43pm | report spam | close Reply |
Re: What he should have..

That's exactly the data I was going to show.

Clearly, the iPod mini can be justified at $250, looking at what else it out there in the HIGH-END flash market. I thought Steve made is very clear that the high end flash market was being targeted with the minis.

Also, you can't look at storage/price through the flash market into the 1.8" HDD market (big original iPods). Obviously, having a relatively larger HDD in the big iPods allows for unmatchable storage/price ratios. Up until now, customers who wanted to spend under $300 were screwed and forced to get only storage measured in hundreds of MB. Now they can get a iPod mini with 4GB for less than some of the other high end flash devices. Some who were probably planning on spending $200 for 256MB Flash Rio will probably find the extra $50 as long as the iPod mini is available at the same retailer.

Of course the price of the iPod mini will drop by $50 in 6 months time while getting storage/feature bumps.

Remember, the iPod mini is in a different class than the iPod. If you want 15GB storage, you get a real iPod or a crappy, big, heavy Dell DJ. They'll say, "are there any players with 15GB as small as the iPod mini?". No, so they'll have to choose what they value as more important: size/weight or overall capacity.

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01/08, 12:45pm | report spam | close Reply |
price and size

I like this statement:
"Less music in a device marginally smaller at about the same price."
followed by
The article notes that the iPod mini is almost 50% smaller in terms of total volume and weighs half as much.

So 50% smaller in volume and weight is 'marginal'? Only the height/width is close to the old, the depth is less, it weighs half as much, it takes up half as much room. Oh, sure, that's marginal.

And why do people always think that price (a) won't come down, and (b) won't sell at a higher price. Generally, new devices sell higher initially and then are scaled down, due to (a) lack of supply, so the higher price keeps the demand down, and (b) suck as much money out of those who want the latest thing. No one complains (OK, they do, but not in the same way) when Hitachi sells Plasma TVs for $10000. How come no one says "Hey, they should sell them for $1000, take a loss, but gain all that marketshare!" Because they know new stuff starts out high and comes down in price.

h***, I learned this in Economics class in college 15 years ago and still remember it. Don't you people learn anything in school besides "Apple must do what I want them to do or I'll rant!"

The biggest problem Apple has is that when they do lower prices on the iPod mini, everyone will then take that as proof that it was overpriced and they screwed up and all that. Its not just a natural price downsize, like the G5 1.6 went down a couple of hundred (no one said that was way overpriced - well, OK, I did, but few others), it was "hey, its cheaper now!". But the iPod, no, can't start that off too high.

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01/08, 12:48pm | report spam | close Reply |
Fair price...

Looking at the market, I beleive that the mini has a fair price, for what you get.

My concern is this- Jobs says "We want to target the high end (256-512mb) flash market of players under $200.00." They then go and release a hard drive based player that is 25% above the price point they are targeting, and has 8x the capacity. That to me is like saying: "I want to shoot that buck out there, so I will aim 6 feet over its head." I think that the majority of people with the sub $200 mp3 players, aren't willing to pay more than that for portable music. It seems to me it would have been a good idea to release a 1gb model for say, $199, then the 4 gig model for $250. That would put the debate in the "do I get the 1 gig, or 3 more gigs for just 50 bucks more??" instead of the current "the 4 gig isnt worth it, as for $50 more, I can have a 15 gig".

Then again, these comments are all my opinion- I dont have tons of market research behind me ;)

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01/08, 12:50pm | report spam | close Reply |
re: Rants

Gee MacDoomed, what were the chances of finding you here?

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01/08, 12:57pm | report spam | close Reply |
But flash is better...

In some ways, flash is better. If you want to work out for an hour with music, you don't need much storage capacity and you don't want a hard-drive based machine (ipods *do* skip). Something cheap, light-weight, with limited storage done the apple way (i.e. good design) would have been how to go after this market.

With something like this, they could have sold to existing ipod owners as well. Nobody needs both an ipod and a minipod, but many people who already have ipods want something smaller and skip-proof for workouts.

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01/08, 01:11pm | report spam | close Reply |
I wouldn't presume. . .

It may have been an undifferentiated edict from Steve, but then again, it might have been a decision, based on informed feedback from actual customers and after significant focus groups, that the form factor is the single best advantage of the product.

This is certainly one way to account for the success of the overly expensive and not broadly usable outside of Apple-land (in the early era) iPods ...

Perceptions are reality, and form-factor for personal appliances is HUGE. Look to cell-phones, where form-factor more than any other single feature seems to drive consumer preferences.

In short, it may be WE, who have not done the backup research, who are misinformed and foolish to criticize the new iPods. I haven't seen one yet, but I can well imagine that they may be killer products for form factor alone.

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01/08, 01:25pm | report spam | close Reply |
bring on the mini-mini

I would be far more interested in a smaller flash-based iPod than the current "mini" offering. Think about it: 512MB would still be eight hours of music!

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01/08, 01:36pm | report spam | close Reply |
My Cube isn't Blue

My cube isn't blue. It's grey. Actually, since I got a new Powerlogix case, it's looking like a G5 ;-)

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01/08, 02:10pm | report spam | close Reply |
Is Jobs Nuts?

I'm a big Apple fan and could even sometimes be accused of being a 'zealot'. I use an iBook and have a 10 gig iPod. However, Steve's RDF won't fool anyone this time. It doesn't take a genius to figure out that for $50 bucks more I can get over three times more capacity. I think that anyone who's got $249 to blow on a freaking MP3 player could cough up another $50 for three times the songs.

Plus the advertisement on apple.com makes it look horrible. All you have to do is look on Apple's site and see the iPod mini next to the original. The caption on one has $299 and 10,000 songs. The caption on the other has $249 and 1,000. Now, really, for $299 you only get 3700 songs (approx.). So why did they put the 40 gig capacity approximation next to the 15 gig price? It just makes the mini's price seem all that much more unreasonable.

$200 would have been a better price point.

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01/08, 02:17pm | report spam | close Reply |
4 the Rich & Gullible

have any of the post-graduate mathematicians here calculated that given the "volume" of miniPod storage, by opting for MAXiPod, you'll get 400% of its capacity for another 20% of its price?

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01/08, 02:48pm | report spam | close Reply |
Capacity

You guys are COMPLETELY missing the point. Consider this:

MOST PEOPLE do not have music collections that come ANYWHERE NEAR 15GB. Barely 1/10th of that.

MOST PEOPLE would be interested in carrying a selection of just their FAVOURITE stuff around in the smallest, lightest possible configuration. Not every song they own or have ever heard.

MOST PEOPLE have already bought a flash-based p.o.s. tiny player and discovered that it doesn't meet their needs.

Consequently, MOST PEOPLE will look very seriously at the iPod Mini as a SOLUTION, caring *nothing* about the larger-capacity units or price-per-GB like us geek losers.

Besides, it's CUTE! Tee hee hee! Get it?

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01/08, 04:25pm | report spam | close Reply |
Lets look at the business

I felt I had to write after reading your article "A maxiPrice for Apple's miniPod". I would assume someone who writes for business week would have a business background and understand why apple priced the iPod Mini at its current price point.

Apple I am sure understands market driven realities, though they are capable of making mistakes like you pointed out with the Cube. But I think they are smarter then most would give them credit on this product

First, apple knows there is a percentage of people who will buy the product almost at any price, so apple will squeeze as much from that part of the market that they can (I would guess in the mac world it would probably be close to 10% of the buyers) . Second by pricing the smaller iPod within $50 of the low end full size, there is a certain portion of the population that will migrate to the low end full size when they go to buy the iPod Mini. And I would hazard a guess that the margin on the lowend iPod is slightly greater then the iPod mini at this point in time since the drive in the system sells for $499 currently (so figure wholesale is half that and I am sure Apple gets a good deal from Hitachi but I am sure the drive is costing them around the $150 mark)

And just to give you some further research material...here are the prices of simalar sized machines....

$200 256MB Creative Labs MuVo 256MB
$200 256MB Philips PSA 256MAX
$200 256MB Rio Chiba
$220 1.5GB Rio Nitrus
$250 1.5GB iRiver iGP-100
$350 4.0GB Creative Labs MuVo2
$269 512MB Creative Labs MuVo2 X-Trainer
$499 1.0GB Creative Labs MuVo2 X-Trainer

Doesn't look like that iPod mini is so over priced now does it.

So I don't think apple is that "dumb". They are attempting to leverage the iPod mini to drive various sales and when they see the volume of those sales decline, they will drop the price to $199 especially as the price of the drive drops. Either that or they will come out with a 2 gig version for $199.

Just something to think about...I don't think apple is going to be inclined to repeat the same mistake with the cube.

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01/08, 05:00pm | report spam | close Reply |
Re: Lets look at the...

Excellent point!

I think the iPodmini does kill the competition in the "price-size-features" list.

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01/08, 05:06pm | report spam | close Reply |
Priced way too high...

The second I heard the $249 price tag I thought "oh, that's too much". I noticed very little noise comming from the audience when he said the price, so I'm willing to bet we all thought the same thing...

"You get 4 gigs for only $50 more."

Well, do the math... Once you commit yourself to the $249 price tag, you can get over 3 times that amount for $50 more...

Not to mention the price on the formely $299 10 GB iPod is now going to drop with the increase to 15 GB in the baseline model... Chances are in about a month or two you will be able to buy a new 10 GB iPod for somewhere around $259, over twice the size for $10 more... Not to mention I believe you can already get 10 GB Refurbished iPods for $249 currently...

The math just doesn't work here... Now, if it were just $20 cheeper, then the situation would be a little different... $229 seems like a much nicer price, even if it's not that big of a difference...

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01/08, 05:10pm | report spam | close Reply |
Marginal...

So 50% smaller in volume and weight is 'marginal'?

It is when the device you are comparing it to is slightly larger than a cigarette box...

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01/08, 07:09pm | report spam | close Reply |
blue cube

Faulty memory or bad research by the author- almost certainly referring to the Cobalt Cube (or was it Qube?) which was indeed a cube, cobalt blue, bigger than the Mac Cube, and was intended to be a server/appliance. Didn't last too long as a product. I think it started out based on a MIPS processor but later switched to x86, hoping that that would make them more popular when what they really needed (like the Mac Cube?) was to be cheaper.

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01/09, 10:45am | report spam | close Reply |
It's flash! Not Blue!

Too many people seem to miss the IMPORTANT fact that it's flash based- if you read the full article, so does the author (on the other hand, those who read the full article will notice that it states the Cube was white; blue is a typo on part of MacNN). I am not very keen on taking my iPod whenever I'll be shaking and jumping around (like people in those ads). I can almost FEEL the HDD head scrrrratching whenever I do! Ouch!

My biggest complain is this: why didn't it come in designer-friendly black?

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01/09, 11:25am | report spam | close Reply |
iPod mini pricing

Hello from the Expo: During Adam Engsts' User Group speech, he mentioned that Apple had shown the iPod mini to select journalists last month and mentioned a price point of $219. It looks like the redid their market calculations and figured they were "leaving money on the table" thus the $249 price. I predict the price will go down within 3 months to $199, but that extra $30 profit Apple will earn until that time sholud help (assuming they're correct about the demand for the product).

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Business Week: A maxiPrice for Apple's miniPod

updated 11:50 am EST, Thu January 8, 2004

maxiPrice for miniPod

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Blue Cube????

Classic Apple blundering

Gimme a break

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*cough*confusion*cough*

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But flash is better...

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