(a) Fine, go out into the market (ANY market) and look at product lineups. There are high end products and there are low end products, and they are usually from the same company.
(b) I don't think so -- the music player market is much more diverse than the market for Macintoshes. Everybody listens to music, but only a tiny percentage want a Macintosh.
(c) Nonsense, Apple has had a high-end / low-end strategy since 1987. And the low end came first.
There is plenty of room in the market for Apple to have a low cost, low capacity unit based on removable flash media. The resistance to the "jiggle factor" others have mentioned is just a bonus. And the sooner they establish their dominance in that segment of the market, the better. Otherwise bigger fish will come along and gobble it up.
I think you may be misunderstanding me. I am not (at all) opposed to a lower cost iPod, and I believe Apple WILL produce one (they have as much as said so). But I don't know that the conditions are right just yet.
My point about the homogenity of the iPod was simply this...the MAIN differentiator among the models is size/capacity. With computers the differentiators are more varied between levels of products.
I think you may be misunderstanding me. I am not (at all) opposed to a lower cost iPod, and I believe Apple WILL produce one (they have as much as said so). But I don't know that the conditions are right just yet.
My point about the homogenity of the iPod was simply this...the MAIN differentiator among the models is size/capacity. With computers the differentiators are more varied between levels of products.
Apple will likely hold off introducing a low cost player until they are in serious jeapordy of losing their market share. They seem to love playing that game.
Computers are much more complex animals than music players, that means it is possible to differentiate them in more ways. Doesn't change the fact that Apple could differentiate a 3rd type of iPod without too much trouble.
a damn good idea! i have a 20gig 3G iPod and i wudd still buy 1 of those, just coz i love the idea!
although i would give it more than 2 hours of battery life, just because they could, i think SigmaTel, the one that claims it sold a load of drives to Apple, claim it has a battery time in excess of 50 hours, which is pretty impressive, considering the iPod is 12 hours at the moment. which means they may have a colour screen aswell as the wireless reshuffle...
sounds like a good product to me, but with the iPod brand name so strong now, whatever Apple will release will most probably be a huge success.
I'm having trouble believing some of the statements in this thread.
Steve Jobs has come out and said that he thinks the iPod is too expensive! Yes, the iPod is doing really well, but if you look at its sales relative to the overall consumer market, it could do so much better.
I have no doubt that as soon as Apple can find a way to field a cheaper iPod, they will. They will not release some crap just to hit a price point, but if they can release a compelling product for $99 or $149 I don't doubt that they will.
The main things keeping the iPod's price up: Miniaturization isn't cheap, and the amount of storage has to be significantly better than a CD to be worth the extra cost over a portable CD player and the extra trouble of having to synch with a computer. Both of these problems are quite soluble, given time.
It occurred to me that if Apple did go with an iPod that took CF cards iPod (unlikely IMO, but not out of the question) they could make up for the lower storage capacity by allowing you to match individual CF cards to playlists. So you'd have your 32MB card matched to your "Jogging" playlist, your 2GB card matched to your "Road Trip" playlist, etc., and your iPod would synch with the playlist appropriate to whichever card it contained.
Heck, once you had Home on iPod you could stick a CF card in there from a camera, browse the contents in some rudimentary fashion from the menu hierarchy, maybe output them to a TV or arrange them into "playlists" (slideshows), and synch them with iPhoto...
Yes, the iPod is doing really well, but if you look at its sales relative to the overall consumer market, it could do so much better.
Do you have some facts that can support this assertion?
Quote:
I have no doubt that as soon as Apple can find a way to field a cheaper iPod, they will. They will not release some crap just to hit a price point, but if they can release a compelling product for $99 or $149 I don't doubt that they will.
Don't forget profitable. Thankfully all of the "Apple should sell a cheaper iPod at a loss and make it up in volume" folks have gone away or come to their senses. Apple WILL produce a cheaper iPod...but it has to be profitable for them too. What most people also forget is that the TOTAL profit Apple can make from iPod is being managed as well. As long as they are selling all that they can make at the current prices, it is stupid to sell a cheaper one. When that demand begins to level off, then they can attack the next market tier. Despite what many here seem to believe, Apple appears to be managing its business rather astutely.
Do you have some facts that can support this assertion?
A quick Google retrieves this PDF from the US Census Bureau, which puts consumer spending at "electronics and appliance [retail] stores" at $87.7 billion for the year 2001.
Put another way, Microsoft only looks at markets worth at least $1 billion per year. iPod/iTMS isn't that big yet. That means that if Redmond had developed iPod/iTMS and accurately predicted their success to date, they wouldn't have launched! That gives some indication of the size of the industry, measured by the size of one of the leaders.
And that's in the US. But Apple is an international company. Alex Salkever brought in sales data outside of the markets Apple uses to calculate iPod's market share, and concluded that its worldwide market share is 8-10% - still a leader overall, but not dominant. Also, according to < http://www.cdrinfo.com/Sections/News...x?NewsId=10321 >, using data from SE Asian source DigiTimes, the Chinese bought 4 million MP3 players sofar this year, with 128MB players collectively commanding 50% market share. This is obviously a completely different market than, say, New York City, which is crawling with iPods.
Quote:
Don't forget profitable.
I alluded to profitability in my explanation of what kept the iPod expensive. I'm assuming that Apple won't release a product that messes with their carefully groomed margins.
consumer spending at "electronics and appliance [retail] stores" at $87.7 billion for the year 2001.
This seems a little unfair doesn't it? I mean you are making a comparison of Apple's single product family (iPod) against ALL of the money spent in "electronics and appliance [retail] stores" (which, I presume includes TVs, plasma TVs, stereos, DVD players, car audio, and...possibly also appliances...media...etc.) Furthermore, Apple is running about $1B (annualized) in iPod sales. That is more than 1% of the total money spent in "electronics and appliance [retail] stores" listed above...for ONE product!
But, perhaps more importantly, we should look at iPod sales rate of growth compared to the consumer electronics market's rate of growth (and I'd like to narrow the definition of "consumer electronics" to...well..."consumer electronics")...though the definition above is probably fair since it represents disposable income consumers are spending on "fun stuff" in general (execpt for the appliances of course). And the fact is, I only have so many $$ and the $200 I spend buying DVDs can't also be spent on a new iPod.
So the real question is how fast is iPod growing relative to the market it is playing in. This is the problem with the Mac. Macs are still selling 2-4 million a year...but the sales are not growing AS FAST as the PC side.
P.S. Apple DOES need to get into the Chinese market. They are expecting to sell something like 4 BILLION MP3 players in the next several years!
This seems a little unfair doesn't it? I mean you are making a comparison of Apple's single product family (iPod) against ALL of the money spent in "electronics and appliance [retail] stores" (which, I presume includes TVs, plasma TVs, stereos, DVD players, car audio, and...possibly also appliances...media...etc.)
The point was simply to convey some idea of the size of the overall market.
Quote:
So the real question is how fast is iPod growing relative to the market it is playing in. This is the problem with the Mac. Macs are still selling 2-4 million a year...but the sales are not growing AS FAST as the PC side.
I don't have that information, but that wouldn't really impact my argument anyway. If it's growing really rapidly relative to the overall market, that simply means that there's a lot of room for growth, which means that there's room for further diversifying the product line.
More significant are data like the market share of 128MB players in China. That's a large and rapidly growing market skewed heavily to the low end, so if Apple's looking beyond just the US market, a flash player makes more sense. They might not go all the way down to 128MB, which is barely adequate, but they have a lot of room below the iPod mini before they get that far down. I think it's feasible.
Even if they just dropped the mini's price to $199, that would have a significant impact. But, of course, they can't do that before they're sure it won't wreak havoc on their business model.
More significant are data like the market share of 128MB players in China. That's a large and rapidly growing market skewed heavily to the low end, so if Apple's looking beyond just the US market, a flash player makes more sense. They might not go all the way down to 128MB, which is barely adequate, but they have a lot of room below the iPod mini before they get that far down. I think it's feasible.
Perhaps even more important is to find out what the Chinese market really wants. I don't know the condition of the U.S. market B.I. (Before iPod)...it might have been the same way (lots of small capacity MP3 players), then Apple came in and offered what many people wanted all along.
I am doubtful that 128/256/512MB players are in for the long haul. Size (physical) does matter. Apple has gotten closer with Mini. I would not be too surprised to see "iPod Mini Mini"...2GB...flash-based...smaller...lighter...cheaper ($149?)...500 songs on your lanyard! If Apple can do this, I think they'll own the market.
As long as they are selling all that they can make at the current prices, it is stupid to sell a cheaper one. When that demand begins to level off, then they can attack the next market tier. Despite what many here seem to believe, Apple appears to be managing its business rather astutely.
There are 2 separate issues here...
As long as they are selling all that they can make at the current price, it is stupid to sell it AT A CHEAPER PRICE. Supply and demand - charge what you can and reduce the price over time as demand wanes.
That doesn't mean there isn't ALSO a market for cheaper devices with smaller memory (for example). Though Apple would have to be careful how they managed this, and also make sure they keep making money.
Do Apple want a larger marketshare, or to be the premium (and more expensive) product?
As long as they are selling all that they can make at the current price, it is stupid to sell it AT A CHEAPER PRICE. Supply and demand - charge what you can and reduce the price over time as demand wanes.
That doesn't mean there isn't ALSO a market for cheaper devices with smaller memory (for example). Though Apple would have to be careful how they managed this, and also make sure they keep making money.
Do Apple want a larger marketshare, or to be the premium (and more expensive) product?
Agreed. And I think they DO want a larger share of the market. I think they WILL offer something. I think it is only a matter of time, and likely has a lot more to do with ABILITY rather than DESIRE. They just may not be able to do a decent product for cheaper right now.
Having made that argument, I feel compelled to point out that the analyst mentioned in the article is apparently using this reasoning:
Apple is using a new supplier for iPod controller chips; this supplier makes controller chips for flash players; ergo, Apple is developing a flash player.
Given that the supplier also makes controllers for hard drive based players, this seems far fetched. So it's not unlikely that Apple will continue to stick with hard drives, and stick with a baseline capability to store 1,000 songs. The price will decrease along with the cost of providing that baseline capability.
Comments
Originally posted by Programmer
(a) Fine, go out into the market (ANY market) and look at product lineups. There are high end products and there are low end products, and they are usually from the same company.
(b) I don't think so -- the music player market is much more diverse than the market for Macintoshes. Everybody listens to music, but only a tiny percentage want a Macintosh.
(c) Nonsense, Apple has had a high-end / low-end strategy since 1987. And the low end came first.
There is plenty of room in the market for Apple to have a low cost, low capacity unit based on removable flash media. The resistance to the "jiggle factor" others have mentioned is just a bonus. And the sooner they establish their dominance in that segment of the market, the better. Otherwise bigger fish will come along and gobble it up.
I think you may be misunderstanding me. I am not (at all) opposed to a lower cost iPod, and I believe Apple WILL produce one (they have as much as said so). But I don't know that the conditions are right just yet.
My point about the homogenity of the iPod was simply this...the MAIN differentiator among the models is size/capacity. With computers the differentiators are more varied between levels of products.
Originally posted by Chris Cuilla
I think you may be misunderstanding me. I am not (at all) opposed to a lower cost iPod, and I believe Apple WILL produce one (they have as much as said so). But I don't know that the conditions are right just yet.
My point about the homogenity of the iPod was simply this...the MAIN differentiator among the models is size/capacity. With computers the differentiators are more varied between levels of products.
Apple will likely hold off introducing a low cost player until they are in serious jeapordy of losing their market share. They seem to love playing that game.
Computers are much more complex animals than music players, that means it is possible to differentiate them in more ways. Doesn't change the fact that Apple could differentiate a 3rd type of iPod without too much trouble.
a damn good idea! i have a 20gig 3G iPod and i wudd still buy 1 of those, just coz i love the idea!
although i would give it more than 2 hours of battery life, just because they could, i think SigmaTel, the one that claims it sold a load of drives to Apple, claim it has a battery time in excess of 50 hours, which is pretty impressive, considering the iPod is 12 hours at the moment. which means they may have a colour screen aswell as the wireless reshuffle...
sounds like a good product to me, but with the iPod brand name so strong now, whatever Apple will release will most probably be a huge success.
Steve Jobs has come out and said that he thinks the iPod is too expensive! Yes, the iPod is doing really well, but if you look at its sales relative to the overall consumer market, it could do so much better.
I have no doubt that as soon as Apple can find a way to field a cheaper iPod, they will. They will not release some crap just to hit a price point, but if they can release a compelling product for $99 or $149 I don't doubt that they will.
The main things keeping the iPod's price up: Miniaturization isn't cheap, and the amount of storage has to be significantly better than a CD to be worth the extra cost over a portable CD player and the extra trouble of having to synch with a computer. Both of these problems are quite soluble, given time.
It occurred to me that if Apple did go with an iPod that took CF cards iPod (unlikely IMO, but not out of the question) they could make up for the lower storage capacity by allowing you to match individual CF cards to playlists. So you'd have your 32MB card matched to your "Jogging" playlist, your 2GB card matched to your "Road Trip" playlist, etc., and your iPod would synch with the playlist appropriate to whichever card it contained.
Heck, once you had Home on iPod you could stick a CF card in there from a camera, browse the contents in some rudimentary fashion from the menu hierarchy, maybe output them to a TV or arrange them into "playlists" (slideshows), and synch them with iPhoto...
Originally posted by Amorph
Yes, the iPod is doing really well, but if you look at its sales relative to the overall consumer market, it could do so much better.
Do you have some facts that can support this assertion?
I have no doubt that as soon as Apple can find a way to field a cheaper iPod, they will. They will not release some crap just to hit a price point, but if they can release a compelling product for $99 or $149 I don't doubt that they will.
Don't forget profitable. Thankfully all of the "Apple should sell a cheaper iPod at a loss and make it up in volume" folks have gone away or come to their senses. Apple WILL produce a cheaper iPod...but it has to be profitable for them too. What most people also forget is that the TOTAL profit Apple can make from iPod is being managed as well. As long as they are selling all that they can make at the current prices, it is stupid to sell a cheaper one. When that demand begins to level off, then they can attack the next market tier. Despite what many here seem to believe, Apple appears to be managing its business rather astutely.
Originally posted by Chris Cuilla
Do you have some facts that can support this assertion?
A quick Google retrieves this PDF from the US Census Bureau, which puts consumer spending at "electronics and appliance [retail] stores" at $87.7 billion for the year 2001.
Put another way, Microsoft only looks at markets worth at least $1 billion per year. iPod/iTMS isn't that big yet. That means that if Redmond had developed iPod/iTMS and accurately predicted their success to date, they wouldn't have launched! That gives some indication of the size of the industry, measured by the size of one of the leaders.
And that's in the US. But Apple is an international company. Alex Salkever brought in sales data outside of the markets Apple uses to calculate iPod's market share, and concluded that its worldwide market share is 8-10% - still a leader overall, but not dominant. Also, according to < http://www.cdrinfo.com/Sections/News...x?NewsId=10321 >, using data from SE Asian source DigiTimes, the Chinese bought 4 million MP3 players sofar this year, with 128MB players collectively commanding 50% market share. This is obviously a completely different market than, say, New York City, which is crawling with iPods.
Don't forget profitable.
I alluded to profitability in my explanation of what kept the iPod expensive. I'm assuming that Apple won't release a product that messes with their carefully groomed margins.
Originally posted by Amorph
consumer spending at "electronics and appliance [retail] stores" at $87.7 billion for the year 2001.
This seems a little unfair doesn't it? I mean you are making a comparison of Apple's single product family (iPod) against ALL of the money spent in "electronics and appliance [retail] stores" (which, I presume includes TVs, plasma TVs, stereos, DVD players, car audio, and...possibly also appliances...media...etc.) Furthermore, Apple is running about $1B (annualized) in iPod sales. That is more than 1% of the total money spent in "electronics and appliance [retail] stores" listed above...for ONE product!
But, perhaps more importantly, we should look at iPod sales rate of growth compared to the consumer electronics market's rate of growth (and I'd like to narrow the definition of "consumer electronics" to...well..."consumer electronics")...though the definition above is probably fair since it represents disposable income consumers are spending on "fun stuff" in general (execpt for the appliances of course). And the fact is, I only have so many $$ and the $200 I spend buying DVDs can't also be spent on a new iPod.
So the real question is how fast is iPod growing relative to the market it is playing in. This is the problem with the Mac. Macs are still selling 2-4 million a year...but the sales are not growing AS FAST as the PC side.
P.S. Apple DOES need to get into the Chinese market. They are expecting to sell something like 4 BILLION MP3 players in the next several years!
Originally posted by Chris Cuilla
This seems a little unfair doesn't it? I mean you are making a comparison of Apple's single product family (iPod) against ALL of the money spent in "electronics and appliance [retail] stores" (which, I presume includes TVs, plasma TVs, stereos, DVD players, car audio, and...possibly also appliances...media...etc.)
The point was simply to convey some idea of the size of the overall market.
So the real question is how fast is iPod growing relative to the market it is playing in. This is the problem with the Mac. Macs are still selling 2-4 million a year...but the sales are not growing AS FAST as the PC side.
I don't have that information, but that wouldn't really impact my argument anyway. If it's growing really rapidly relative to the overall market, that simply means that there's a lot of room for growth, which means that there's room for further diversifying the product line.
More significant are data like the market share of 128MB players in China. That's a large and rapidly growing market skewed heavily to the low end, so if Apple's looking beyond just the US market, a flash player makes more sense. They might not go all the way down to 128MB, which is barely adequate, but they have a lot of room below the iPod mini before they get that far down. I think it's feasible.
Even if they just dropped the mini's price to $199, that would have a significant impact. But, of course, they can't do that before they're sure it won't wreak havoc on their business model.
Originally posted by Amorph
More significant are data like the market share of 128MB players in China. That's a large and rapidly growing market skewed heavily to the low end, so if Apple's looking beyond just the US market, a flash player makes more sense. They might not go all the way down to 128MB, which is barely adequate, but they have a lot of room below the iPod mini before they get that far down. I think it's feasible.
Perhaps even more important is to find out what the Chinese market really wants. I don't know the condition of the U.S. market B.I. (Before iPod)...it might have been the same way (lots of small capacity MP3 players), then Apple came in and offered what many people wanted all along.
I am doubtful that 128/256/512MB players are in for the long haul. Size (physical) does matter. Apple has gotten closer with Mini. I would not be too surprised to see "iPod Mini Mini"...2GB...flash-based...smaller...lighter...cheaper ($149?)...500 songs on your lanyard! If Apple can do this, I think they'll own the market.
Originally posted by Chris Cuilla
As long as they are selling all that they can make at the current prices, it is stupid to sell a cheaper one. When that demand begins to level off, then they can attack the next market tier. Despite what many here seem to believe, Apple appears to be managing its business rather astutely.
There are 2 separate issues here...
As long as they are selling all that they can make at the current price, it is stupid to sell it AT A CHEAPER PRICE. Supply and demand - charge what you can and reduce the price over time as demand wanes.
That doesn't mean there isn't ALSO a market for cheaper devices with smaller memory (for example). Though Apple would have to be careful how they managed this, and also make sure they keep making money.
Do Apple want a larger marketshare, or to be the premium (and more expensive) product?
Originally posted by GregAlexander
There are 2 separate issues here...
As long as they are selling all that they can make at the current price, it is stupid to sell it AT A CHEAPER PRICE. Supply and demand - charge what you can and reduce the price over time as demand wanes.
That doesn't mean there isn't ALSO a market for cheaper devices with smaller memory (for example). Though Apple would have to be careful how they managed this, and also make sure they keep making money.
Do Apple want a larger marketshare, or to be the premium (and more expensive) product?
Agreed. And I think they DO want a larger share of the market. I think they WILL offer something. I think it is only a matter of time, and likely has a lot more to do with ABILITY rather than DESIRE. They just may not be able to do a decent product for cheaper right now.
Apple is using a new supplier for iPod controller chips; this supplier makes controller chips for flash players; ergo, Apple is developing a flash player.
Given that the supplier also makes controllers for hard drive based players, this seems far fetched. So it's not unlikely that Apple will continue to stick with hard drives, and stick with a baseline capability to store 1,000 songs. The price will decrease along with the cost of providing that baseline capability.