iPod Mini Gets a Collective Yawn

by Jason at 3:20 am on January 7th, 2004 in General


If you are a regular visitor to 1115.org, it will come as no surprise that we are big supporters of Apple Computer and praise our Macs and iPods loudly and without hesitation. Recently, the rumor mill has been churning regarding a new iPod model that goes head-to-head with the cheap low-end MP3 players—an iPod that would be smaller and cooler than the competition, with a price that would lure even more people into the Apple fold.

The new iPod Mini, introduced yesterday, is indeed smaller. And with the five available colors, it certainly is festive. But the price leaves us wanting more.

At $249, the new 4gb Mini is supposed to compete with the cheap-player competition. And by comparing it to other players*, the price doesn’t seem that bad. Most 256mb players (which have a much less storage) are only 50 bucks less at $200. And a comparable $250 player has only 1.4 gb of storage, far less than the new iPod. So far so good.

Here’s the problem, though. $250 is still a significant amount of money for many people, which will limit the iPod Mini’s appeal as an impulse purchase. And the new player’s biggest competition comes from Apple itself; at $299, the “normal” 15gb iPod offers more than three times the capacity for only $50 more. Those who save up the requisite funds for an iPod will find it hard to justify the Mini when the regular iPod kills it in value.

Apple missed an opportunity here. If they had brought the new player to market for less money (even at $200), it would have created a whole new playing field for portable music devices. An untold number of new consumers would have been introduced to the elegant simplicity of Apple products. But as it stands, the new iPod Mini seems to go after the same customer base that the regular iPod already satisfies, leaving us to wonder why Apple bothered in the first place.

*price comparisons taken from www.bestbuy.com

Trackbacks & Pings

  1. world @ haydur on 07 Jan 2004 at 3:51 pm

    Dude, where’s my $99 iPod?
    For a second there I actually believed that I would be a buying an Apple product soon. I mean a $99 dollar deal for a 2GB storage device / digital audio player seemed to good to turn down. But alas,…

Comments

  1. Forager wrote:

    I’m sure the price will drop within the next few months but I agree… however I would just spend the 50 bucks more and buy the 15gb model if I was going to be dumping a bunch of money into an mp3 player.

    Posted 07 Jan 2004 at 5:33 am

  2. Greedo wrote:

    It’s greed and fear of cannibalization that will inhibit this promising product launch. If the miniPod fails it will be because the price points between products is so screwed up. Apple is scared to lower the price of the MiniPod becuase it could pull sales of the low-end iPod.

    Advice to Apple: Drop the low end iPod! Produce a 20 and 40GB and litter the market with varying sizes of miniPods. Most of you’re sales are of the 20GB size anyway. And try for some not-so-girly colors like cobalt blue, LiveWire orange, or 2003 blackout black. Pastels might work on the chicks Jobs, but not on me.

    The flash-player market will really get hot, but only after Apple drops the price.

    Posted 07 Jan 2004 at 5:55 am

  3. information leafblower wrote:

    $200 would have been ideal but it’s obvious they didn;t want to cannibalize sales.

    I still can;t decide between an eMac and an iBook. Today I am leaning toward the eMac.

    Posted 07 Jan 2004 at 7:29 am

  4. matt wrote:

    I think Apple just blew it. They had to have done research on features vs price points, but it seems that 4GB is too much storage for a lower end model and $250 doesn’t come across as cheap to people who aren’t used to spending the extra money on Apple products.

    I think they should have gone small and cheap to get people used to using iPods. Everyone always wants more capacity, so they would eventually graduate to a full size iPod. How anyone could justify getting a 4GB for $250 when I just got a 40GB for $500 is beyond me.

    Posted 07 Jan 2004 at 7:44 am

  5. Mark wrote:

    How about figuring out a way for a large capacity, non-hard drive MiniPod? And some butcher colors would be nice.

    Posted 07 Jan 2004 at 8:08 am

  6. jean-paul wrote:

    i am typing this message from my g4 cube, which cost far too much and offered far too little.

    nah, i don’t really own a cube.

    Posted 07 Jan 2004 at 8:09 am

  7. Rainer wrote:

    If you think 249,- USD it pricey come over to ol’ Europe - it get’s advertised over here for 299,-Euro (16 % VAT incl.), and that at 1.26 USD for 1 Euro:-(

    I anticipated an original (1. generation, 5 GB) iPod in the 199,- USD range instead - and it had a clickwheel, too, Steve:p

    Posted 07 Jan 2004 at 8:34 am

  8. matt wrote:

    Rainer Wolfcastle:
    You should order one from here and pay in Euros. Then you too cound benefit from the administration’s irresponsible monetary policy. You can thank our grandchildren who are in effect financing your purchase. Yay!

    Posted 07 Jan 2004 at 8:44 am

  9. Dan wrote:

    Taken from Other Word Computing site:

    3.5″ SATA Drive, 200 GB, 8Mb buffer, 7200 rpm
    Price $199.95, price per Gig - $1.00

    2.5″ IDE Drive, 60 GB, 8 Mb buffer, 7200 rpm
    Price $267.95, price per Gig - $4.47

    1 GB SanDisk, Type 1, Compact Flash Memory card
    Price $249.99, price per Gig - $249.99

    Do you see a pattern here? A few weeks ago on MacSurfer there was an article that these 1″ drives would sell in large quantities for $150 each. If that is the price Apple pays it would mean $200 for this mini iPod would be selling them at a loss.

    Posted 07 Jan 2004 at 11:29 am

  10. matt wrote:

    I’m not suggesting that apple take losses on iPods. I never said that it had to be a hard drive based product either. The problem is that they middled themselves. too much space and price for lowenders. They could have used flash memory, people buying a cheap mp3 player wouldn’t have cared what the data was stored on.

    Posted 07 Jan 2004 at 11:39 am

  11. Jason (1115) wrote:

    Dan - here’s the point, as I see it: If the tiny hard drives are so expensive that Apple HAD to make the MiniPiod $249, they should have come up with another plan entirely. Here’s an idea: how about re-introducing the iPod with the original 5gb capacity? Because of the economies of scale (same case as other iPods / standard hard drive size), it would likely cost less than a MiniPod….and maybe would have gotten down to $200 or less.

    Posted 07 Jan 2004 at 11:59 am

  12. Uncle Grambo wrote:

    god damn. every day there’s another incredibly well-written and well-thoughted column here. color me effin’ impressed.

    Posted 07 Jan 2004 at 12:08 pm

  13. Charlie wrote:

    I’m so glad Apple is a charity for the technologically needy.
    How great it is that they can sell things at cost without regard for profit or shareholder value. It’s great they can give everyone what they want so cheaply. Now only if BMW, Rolex, and Gulfstream would adopt the same idea.

    Posted 07 Jan 2004 at 5:37 pm

  14. matt wrote:

    Charlie:

    I can’t speak for anyone else, but it’s not about charity, it’s about good marketing. While Apple is usually very good at it (impressive profits with such small overall market share) i just think they missed the sweet spot in the market on this one.

    Posted 07 Jan 2004 at 5:45 pm

  15. Martha wrote:

    Apple just refuses to “get it” on pricing, the single most important element of marketing.

    After 20 years of pioneering and then losing markets because of poor price-performance tradeoffs, one would think Jobs would learn a lesson.

    Yeah, yeah Steve, it’s insanely great and all that…but MARKET SHARE matters, and customers ARE price sensitive. Stop the gouging and start growing already.

    Posted 07 Jan 2004 at 10:53 pm

  16. John wrote:

    Apple does get it. They seem to get it very well. In spite of what some people say is too high a price the iPod is the market leader.

    The new mini iPod is cutting edge technology. This price also leaves room for price cutting or bundling later.

    Posted 08 Jan 2004 at 12:17 am

  17. Jason (1115) wrote:

    I wouldn’t say Apple doesn’t “get it” on pricing as a blanket statement; after all, I own a PowerMac and a PowerBook in addition to my iPod, and I feel that they have represented a good value. But considering that the 4gb miniPod is a mere $50 less than the 15gb base iPod, in my opinion Apple made a misstep here. They already have excellent penetration in the high-end music player market, but instead of going lower-market (where many more new customers are) they chose to position the miniPod only slightly below their existing products. I know I’m not alone in thinking that this is a curious strategy. I’m not suggesting that Apple sell it as a loss, but maybe they should have been less “cutting edge” and more price-sensitive…like I said above, a smaller hard drive in the current iPod enclosure would have been an efficient way of doing this instead of trying to reinvent the wheel in five pastel colors. And even with the new miniPod enclosure, I think it would have been a worthy tradeoff to exchange some hard drive capacity for a lower price…something like 1.5 or 2gb would serve the average consumer nicely, and it would still have more capacity than the flash-memory competition.

    Posted 08 Jan 2004 at 1:25 am

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