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Apple seen introducing cheaper, more innovative Wi-Fi iPods

post #1 of 42
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With market data clearly showing a deceleration in growth of the standalone MP3 player market, Apple Inc. will reportedly strive to maintain growth in its iPod business by introducing a range of cheaper, more innovative models that incorporate touch-screens and multi-touch technology.

That's the informed speculation on the part of Gene Munster, an analyst covering Apple for investment bank Piper Jaffray. In his latest report to clients, released early Monday morning, he emphasized that the company's December quarter iPod sales represented the lowest year-over-year growth rate in history of the players.

At the same time, however, the analyst noted that the slowdown is indicative of the broader market, where figures from market research firm NPD show yearly spending in the MP3 player segment to have shriveled from 131 percent in 2005 to just 17 percent in 2007.

That said, Munster remains bullish on Apple's prospects in the market and is currently modeling for iPod growth rates to stabilize at approximately 15 percent through the 2009 calendar year.

"In order to achieve this level of year-over-year iPod growth, we are expecting Apple to introduce cheaper, innovative iPods with Wi-Fi and multi-touch technology," he wrote.

Despite the slowdown in sales, the Piper Jaffray analyst noted that Apple over the last three years has maintained a steady but dominate 70 percent share of the MP3 player market. However, during that time it also managed to grow its dollar share of the segment from 71 percent (2004) to 84 percent (2007). That dollar share swelled even further to 90 percent during the first full month of iPod touch sales, thanks largely to the touch-screen players' high average selling prices (ASPs).

"We believe these numbers imply that, despite a slowdown in growth in the MP3 market, Apple's vision of the iPod lineup becoming a mainstream Wi-Fi mobile platform will have two results," Munster advised clients. "First, it will spur growth in the portable media player market, particularly from the replacement cycle. Second, if Apple is able to lower prices on Wi-Fi connected and possibly touchscreen iPods, it will be able to maintain or grow its leading market share position."

The analyst is therefore confident in the Apple's ability to steer its iPod business towards "mobile computing and Internet-connected portable devices. As such, he believes the iPod touch is just the first of several Internet-connected iPods that will inevitably emerge from the company's Cupertino-based design labs.

"Whereas the iPod classic simply enables users to listen to audio and watch video (with some remedial calendar and contacts applications), we believe that Internet connectivity opens the iPod to an entirely new set of possibilities," he wrote. "For starters, as we have seen with the iPod touch and the iPhone, email, full-featured web browsing, a mobile iTunes Store, YouTube, and Google Maps are all possible on an iPod."



Expanding his notion somewhat, Munster in his note to clients went on to speculate that an Internet-connected iPod could even stream content from users libraries hosted remotely, which would eliminate the capacity issues surrounding locally stored media. It could also leverage wireless e-commerce to upset the status quo.

"If for example you are on your way to Starbucks, you could wirelessly order your drink from your iPod, pay for it using your iTunes account or the attached credit card, and pick it up without ever standing in line or waiting at a cash register," he hypothesized. "These features (and possible features) make the iPod touch more of a mobile computing device than a simple iPod."

"We believe Apple is developing such solutions that will enable the company to deliver lower cost, Wi-Fi connected iPods in the near future," the analyst added. "In turn, this new iPod platform should generate continued growth for the iPod segment of Apple's business."

Munster maintained his Buy rating and extremely bullish $250 price target on shares of the electronics company.
post #2 of 42
Quote:
Originally Posted by AppleInsider View Post

"If for example you are on your way to Starbucks, you could wirelessly order your drink from your iPod, pay for it using your iTunes account or the attached credit card, and pick it up without ever standing in line or waiting at a cash register," he hypothesized.

Love the Starbucks example. If it was me trying that, though, I'd crash the car while
fiddling with the multi-touch display, or arrive at the Starbucks seven minutes after
my coffee order had gone stone-cold.
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post #3 of 42
Yeah, the Starbucks example is pretty contrived. But once you have a Touch you find it useful in many unexpected circumstances. Having something that can quickly browse the web from almost anywhere comes in really handy-- airports to track flight status, sitting in front of the TV to access IMDB, at a coffee shop to settle factual arguments... then when traveling, you can Handbrake your favorite DVDs and watch them on the plane and in the hotel. Plus it even plays music!

Maybe Apple needs to create a "loaner" program where they lend Touches out for a week (or have a no-questions-asked return policy for 2 weeks or something). Get the folks addicted then try to take it away from them.
post #4 of 42
I can't wait to buy a $5 cup of coffee with a $400 device. It makes me feel like the rich and famous.

Munster is incredibly unreasonable with his $250 target. Maybe it's a 5 year price target...
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post #5 of 42
After 15 minutes fiddling with my iPod trying to order a coffee I suddenly realize it takes me exactly 5 minutes to pick one up from my favorite coffee shop (NOT SB - theirs is truly awful). Very analogue, I know, but ordering my double strength latte digitally strikes me as even more lame geek than writing this comment.
post #6 of 42
Most wi-fi networks I run across in NYC and LI are locked. It's rare when I find a free and open network to hop on. I do most of my browsing vie Edge when I'm on the go.
post #7 of 42
Well, if Apple pulls off a decent SDK in February, this new "mobile wi-fi platform" is going to get really, really interesting. Look what people are making for the iPhone/iPod Touch already in the hacking community. It's going to be great!
post #8 of 42
Paxman that was great

$250 shares? They're at $130 now, what is he thinking?
post #9 of 42
Don't think of the Starbucks example in the context of a suburban car-based commuter, but of a big-city mass transit commuter, e.g. New York. Riding the subway you place your order just before reaching your stop, walk out of the station, into the Starbucks next to the entrance to your building, pick it up, and on your way.

If this product map has any truth, it would follow Apple's pattern - introduce a "feature poor", "over priced" product with a well thought out UI and ecosystem; then slowly add features in future versions. Maybe it's time for wi-fi on iPods. I hope Apple does introduce some "killer-app" that will make mobile wi-fi really useful. Leveraging iTunes as a general transaction processing environment might be it.

- Jasen.
post #10 of 42
Quick, somebody patent "the ordering and payment of a hot beverage from a popular coffee shop chain using an internet-enabled application and registration based accounting system on a portable MP3 player with a touch-screen interface" and get ready to take Apple to Texas...
post #11 of 42
I'm not a fan of that starbucks example, that shafts everyone that does stand in line or intends to buy with physical money, makes the whole process impersonal and your gonna end up waiting anyways when they make your order wrong or not on time given the amount of orders they could be wirelessly recieving.

Not to mention how much more work it becomes for those kids behind the counter.
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post #12 of 42
Quote:
Originally Posted by jasenj1 View Post

Don't think of the Starbucks example in the context of a suburban car-based commuter, but of a big-city mass transit commuter, e.g. New York. Riding the subway you place your order just before reaching your stop, walk out of the station, into the Starbucks next to the entrance to your building, pick it up, and on your way.

Forget having to order the coffee your self, how about the iPod (or iPhone) has some clever program ( which based on GPS, traffic reports, coffee shop reports, whether you're walking or driving, etc) which will order the coffee for you at the right time so that when you arrive at said coffee shop, it has just been made.
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post #13 of 42
Quote:
Originally Posted by AppleInsider View Post

"If for example you are on your way to Starbucks, you could wirelessly order your drink from your iPod, pay for it using your iTunes account or the attached credit card, and pick it up without ever standing in line or waiting at a cash register," he hypothesized.

Better yet... my ipod alarm knows it is time to wake me up but instead it sends an email to my office computer which completes all my work for the day and it cancels my coffee order so I can sleep in... better yet, why ever get up at all?
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post #14 of 42
Quote:
Originally Posted by AppleInsider View Post

"If for example you are on your way to Starbucks, you could wirelessly order your drink from your iPod, pay for it using your iTunes account or the attached credit card, and pick it up without ever standing in line or waiting at a cash register," he hypothesized.

And how exactly do you just "pick it up without ever standing in line..."?

How do you know you're picking up the right drink? By prying off the lids and trying to figure out what's underneath all that foam? Will no one question you if you just walk in and pick up a drink from the bar and walk right back out?
post #15 of 42
Quote:
Originally Posted by blingem View Post

Paxman that was great

$250 shares? They're at $130 now, what is he thinking?

They were less than $50 in June '06.

See how it works?
post #16 of 42
Quote:
Originally Posted by JupiterOne View Post

And how exactly do you just "pick it up without ever standing in line..."?

How do you know you're picking up the right drink? By prying off the lids and trying to figure out what's underneath all that foam? Will no one question you if you just walk in and pick up a drink from the bar and walk right back out?

Wait what?

My local coffee shop has managed to solve these extraordinarily complex issues. Here's how: they have a separate area for online-order pickup, and they use a tried and tested method for drink identification: they write your name on the cup.
post #17 of 42
Quote:
Expanding his notion somewhat, Munster in his note to clients went on to speculate that an Internet-connected iPod could even stream content from users libraries hosted remotely, which would eliminate the capacity issues surrounding locally stored media. It could also leverage wireless e-commerce to upset the status quo.

"If for example you are on your way to Starbucks, you could wirelessly order your drink from your iPod, pay for it using your iTunes account or the attached credit card, and pick it up without ever standing in line or waiting at a cash register," he hypothesized. "These features (and possible features) make the iPod touch more of a mobile computing device than a simple iPod."

Erm, he didn't hypothesize anything.
http://www.forbes.com/technology/200...7appatent.html
http://www.genoco.com/link/interactive_quickOrder.html

The first link points to a Forbes article from the day after Christmas that uncovered an Apple patent to the Starbucks effect. The second to a rather convincing UI of the vaporware.

Also, who here thinks Piper Jaffray sounds like a seedy stripper?
post #18 of 42
Quote:
Originally Posted by AppleInsider View Post

Apple seen introducing cheaper, more innovative Wi-Fi iPods

Seen where exactly?

Someone's imagination doesnt count, no matter HOW well informed they are
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post #19 of 42
Quote:
Originally Posted by jouster View Post

they use a tried and tested method for drink identification: they write your name on the cup.


Have they patented that ?? it sounds like a promising innovation!
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post #20 of 42
Not a fan of the Starbucks example. However if my local curry or chinese had a website that I could order on, I could see myself browsing the options whilst I was on the train, placing an order, then by the time I'm there it would be ready for my to pick up. That would be incredibly useful, and certainly contribute to my general lack of healthy behaviour.

Of course I could just ring them and place the order instead.
post #21 of 42
Keep pumping that $250 price, Gene.
As for me, once bitten, and all that. If it hits $200 again, I'll be profit taking.

I've liked the idea of iPod as generalized debit card tho' ever since that became the obvious goal with the Starbucks announcement last year. But I don't think that will be widely available until there' some sort of agreed-upon protocol. IP$ ?
post #22 of 42
Quote:
Originally Posted by GQB View Post

I've liked the idea of iPod as generalized debit card tho' ever since that became the obvious goal with the Starbucks announcement last year. But I don't think that will be widely available until there' some sort of agreed-upon protocol. IP$ ?

All they would need is an RFID similar to what Visa/Mastercard have in their touch cards now. In fact, I could see enterprising banks giving away iPods in place of debit cards for their high end customers. Have your mortgage, checking, savings, credit card, IRA with us and we'll give you a debit iPod.

Now intuit just needs to make a quicken worth using on the Mac and pocket quicken for the iPod that automatically reads the transactions from your embedded RFID visa chip and we are golden.
post #23 of 42
Quote:
Originally Posted by Walter Slocombe View Post

Seen where exactly?

Someone's imagination doesnt count, no matter HOW well informed they are

AI does abuse words a bit too often. It might be a shortening of "forseen".
post #24 of 42
Quote:
Originally Posted by jasenj1 View Post

Don't think of the Starbucks example in the context of a suburban car-based commuter, but of a big-city mass transit commuter, e.g. New York. Riding the subway you place your order just before reaching your stop, walk out of the station, into the Starbucks next to the entrance to your building, pick it up, and on your way.

So there's no line purchase but line around the block waiting to pick up.
They aren't just gonna hand over a cup to everyone who walks up. Gonna have to check ID or something.
post #25 of 42
They've just GOT to come up with a better real world example to entice people than the Starbucks coffee order, although I'd rate it marginally better than the MS 'phone home to your refrigerator to see if you need milk' trollop that they've been doling out for the last 10 years ... has anyone ever gotten excited about that one?
post #26 of 42
Quote:
Originally Posted by JupiterOne View Post

And how exactly do you just "pick it up without ever standing in line..."?

How do you know you're picking up the right drink? By prying off the lids and trying to figure out what's underneath all that foam? Will no one question you if you just walk in and pick up a drink from the bar and walk right back out?

Step smartly up to the counter while brandishing your iPhone in a confident manner, grab a drink and walk off.

I am so trying this!

Coffee ninja'ing.

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post #27 of 42
Quote:
Originally Posted by Chris_CA View Post

So there's no line purchase but line around the block waiting to pick up.
They aren't just gonna hand over a cup to everyone who walks up. Gonna have to check ID or something.

That's what I was thinking when I posted my comment above. They make it all sound so quick and simple, like those Visa check card commercials. But in reality, there is going to be some kind of interaction with an employee, even if it is to check an "online" (iPod) receipt. You may not have to wait in some long line to place your order, then wait for it to be made, but it also won't be walk in, grab your order, walk out.
post #28 of 42
Quote:
Originally Posted by Chris_CA View Post

So there's no line purchase but line around the block waiting to pick up.
They aren't just gonna hand over a cup to everyone who walks up. Gonna have to check ID or something.

That still has to be quicker than a line of people hemming and hawing about what they want, speed up multiple item or specialty orders, and trying to dig out exact change from their pocket.
post #29 of 42
The US and the "old" EU members are behind in paying technology.
For example in the Baltic states they don't "plant" parking meters anymore.
You pay with your mobile.
The interface of an iphone or Ipod touch will give much more possibilities to make "small" payments.

Starbucks is just the tip of the iceberg.
The Iphone or Ipod touch with that kind of technology could become the new visa card

Let's see what sdk brings , but I guess on some really creative apps and then the stock will get a kick again... :-)
post #30 of 42
The new WiFi applications are potential killers!!!

I love the Starbucks idea (as long as it has the Vaporware UI) and it would be great to have a wealth of merchandise and digital content appear everytime i'm at a gig or at the movies!

Walk into the cinema... Pay for my Drinks and Popcorn through iTunes if I want to (my ticket and seating arrangements were already completed iPod stylee before I arrived). My iPod presents upcoming movie trailers/news that may be of interest. There are so many scary possibilities it's unreal!

You could use the preferences to select when and how these kinds of features work for you.

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post #31 of 42
How about rather than ordering on the way to the shop you walk into a restaurant, take a seat, whip out your iPhone/iPod Touch and get the menu with today's specials. You place your order via your handheld and the only time you need a human is when they carry your food or drink to the table. Oh, and you pay your bill at the end via your handheld.
post #32 of 42
Quote:
Originally Posted by AppleInsider View Post

With market data clearly showing a deceleration in growth of the standalone MP3 player market, Apple Inc. will reportedly strive to maintain growth in its iPod business by introducing a range of cheaper, more innovative models that incorporate touch-screens and multi-touch technology.

Right prediction. Wrong reason. The game is much, much bigger than that...

I think the iPod Touch and the iPhone represent a whole new category of device: the information appliance as pocket computing. The Touch is a LAN device that happens to be able to play music. The iPhone is a WAN device that happens to be able to make calls.

Maybe it's hard to see that right now, because these devices are dressed up to fit into existing categories. But these categories are not where the value lies for Apple or for its customers. For millions of people, a Touch-like device could potentially serve as their primary - perhaps even their only - computer.

It's an idea whose time has come. Apple has plenty of product development work to do (and wireless network technologies have to strengthen) but we can see the road ahead. If Apple can manage the marketing of a new category of device (and no-one would doubt it has the capability) then it could win this segment before its competitors have even touched the ball.

If Apple releases an XL size Touch in the next 12 months, we'll know it's thinking along these lines.
post #33 of 42
With Apple stocks falling Steve Jobs better do more than just Wi-Fi for iPods.
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post #34 of 42
Quote:
Originally Posted by blingem View Post

Paxman that was great

$250 shares? They're at $130 now, what is he thinking?


According to my past Post-It® Notes stuck on my iMac at my desk at home, this is what they might be thinking, - past AAPL stock price experience, like when they had "record profits" and the stock was up 12 bucks to $186.16 on October 23, 2007.

The stock continued upward to 192.68 on Nov. 7. 2007.

On Nov.12, 2007 when the market had a corrections AAPL was at $153.76. That's what, a 38.92 drop in five days. It took a month to rebound back to where it was.

Politicians who want to get elected, will continue to bad mouth the economy and will only compound other down-turn economic forces, so it may take longer than a month to recoup but hopefully, as a stockholder, it will recoup to at least near 200.00 again, 250 would just be gravy on top.

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post #35 of 42
One of the many solutions available: When you place the order you have a 4-number pin in your order list. Starbucks write your name on the top of the coffee. When you walk in, the wi-fi detects that it's "you", and highlights your name on a display (along with the pin). You tell them the number, or show, have your coffee handed over and walk out.

- Order (Get number)
- Walk in
- Say number
- Receive coffee

Anything along these lines of using the wi-fi to see who you are would make it quick and easy.
post #36 of 42
Quote:
Most wi-fi networks I run across in NYC and LI are locked.

Yes most are. But you can find free hotspots around most public parks, all city libraries, Whole Foods, Cafe's, McDonalds.

Here is a list of 118 free hotpots around New York.

Its a shame ATT doesn't allow us free access to its WiFi.
post #37 of 42
Quote:
Its a shame ATT doesn't allow us free access to its WiFi.

It is even worse that they do not include their WiFi hotspots as part of their cellular data plan subscriptions.
post #38 of 42
Quote:
Originally Posted by TenoBell View Post

Yes most are. But you can find free hotspots around most public parks, all city libraries, Whole Foods, Cafe's, McDonalds.

Here is a list of 118 free hotpots around New York.

Its a shame ATT doesn't allow us free access to its WiFi.

NYC is about 8.9 billion square feet of land area. Even being generous at saying that an AP covers 10,000 sq fft, that's only 1.1 million sq ft, it looks like 0.01% coverage.
post #39 of 42
Quote:
NYC is about 8.9 billion square feet of land area. Even being generous at saying that an AP covers 10,000 sq fft, that's only 1.1 million sq ft, it looks like 0.01% coverage.

Yes but most of the coverage is in areas where the largest number of people will socialize, shop, eat, or relax.
post #40 of 42
Quote:
Originally Posted by hawks5999 View Post

All they would need is an RFID similar to what Visa/Mastercard have in their touch cards now. In fact, I could see enterprising banks giving away iPods in place of debit cards for their high end customers. Have your mortgage, checking, savings, credit card, IRA with us and we'll give you a debit iPod.

Now intuit just needs to make a quicken worth using on the Mac and pocket quicken for the iPod that automatically reads the transactions from your embedded RFID visa chip and we are golden.

About the quicken thing, check out www.buxfer.com. It is a GREAT webbased quicken alternative that I just discovered today. and it has an AWESOME (although still incomplete) iphone/ipod touch interface. I'm addicted to it. And it can synchronize to other banks.

On topic, I just got the iphone a few days ago ( after reading every article since it's introduction- i'm obsessed), and I love it, and can't wait for more integration.
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