Steve Jobs, iTunes and Cheaper iPod?

[MacRumors]

Newsweek (http://www.msnbc.com/news/982147.asp) posts a short interview with Steve Jobs about the new iTunes Music Store for Windows.

The interview touches on Apple vs. Microsoft, as well as the frequent topic of a cheaper iPod:


Q: Some think you wouldn’t want to sell a $100 iPod because the profit margin would be so low.

Jobs: What are you talking about? We’d love to have a $100 iPod! We just don’t know how to do it right now. We’re constantly trying to make cheaper iPods. We’re working on the next step.

[arnette]

The only thing that's holding me back from buying the 20GB iPod is the price. If it were 100 bucks lower, I would buy it tomorrow.

Yeah, the iPod is a music only device. And that's cool... I can dig it. But for ****es' sake, make it a little less!! I'm typing this on my iBook and I really want to take my music with me (I'm a fan and customer of the iTunes Music Store). iPod is the best intigration device I know of but a lower price would seal the deal.

Here's hoping!

[ColoJohnBoy]

That would be awesome! I hope whatever this next step is, they take it soon. Perhaps a 20 GB iPod for $100, a 40 GB for $200, and a 60 GB for $300. Only time will tell, but if they can figure out how to drop their prices, Apple's market share of MP3 players wil skyrocket.

[alphaone]

Or maybe at the next ipod product update they could do it like this: 10GB: $149, 20-30GB: $249, 40-60GB: $349. Or something like that. Maybe they could add a forth model or something to fill it in.

If the 10GB ipod's price was that low I'd pick it up in a heart beat. I want one right now, but $269 for the 10Giger (which is all I need) is way too much for me :(.

[LoopHoles]

okay, wanting twice the GBs for a third of the price is a bit too much. i got my no-dock 20GB ipod for $300. it IS very expensive. won't surprise me if apple decides to cut the 10 or 15 GB model to $200 right before the pepsi promotion kicks off. $200 is regarded as a magic price point for consumer devices. that combination will be like a fire vortex. it'll just sweep the market from its feet. however, keep in mind that the profit margin on the ipod is very important to apple. they're not making money on the iTMS yet.

$100? maybe in two years. it depends on volume. is toshiba going to make a cheap enough hard drive?

[eddyg]

Originally posted by alphaone
Or maybe at the next ipod product update they could do it like this: 10GB: $149, 20-30GB: $249, 40-60GB: $349. Or something like that. Maybe they could add a forth model or something to fill it in.

That would work if the major cost associated with the different size iPods were the cost to Apple of the hard disk. However I reckon that that is not the case, and that there is a fixed high cost associated with the rest of the iPod that they need to bring down before you will see cheaper iPods.

At the moment the lower capacity iPods probably have a lower margin than the higher capacity ones, which all up gives an OK margin over all. Which means that there is a fine balancing act between models, price and demand for them to get their desired margin for the entire range.

So, unless components get cheaper, their assembly costs go down, they redesign using cheaper components, or they redesign with less functionality I don't see a huge change in bottem end pricing as a possibility.

Cheers, Edward.

[tristan]

I think it was a dumb question by the interviewer. The miniature hard drive alone costs around $100, so you're really not going to see a $100 ipod anytime soon.

Anyway, Apple considers itself a premium brand, and generally prices its products a little higher than the competition. It's like asking Louis Vitton if they'll come up with a $20 handbag. Even if they could do it, it wouldn't have the quality that you'd expect.

I think Apple's prices get out of hand sometimes. I almost bought an airport last week - almost - then I found a 4 port wireless hub/router for $30 after rebate. Sure, the airport's better, but if something will do the job for $30, it's hard to justify spending $200. (Especially in a recession.)

[weev]

"Celestial Jukebox"

Not heard of that one before. Anyone got more info on this future technology?

NEWSWEEK: Your business model is based on people owning their music. But in 10 or 20 years, isn’t there the possibility for high-speed wireless transmission—the “celestial jukebox” where no one owns music but has access to everything?
STEVE JOBS: God, I wish there was. But the bandwidth revolution is happening so slowly. I don’t see it happening that fast. I hope it does, and we’ll be there.

[Rod Rod]

Another iPod possibility is moving away from HD storage and into flash memory type storage (similar to SD/MMC/xD, but not necessarily removeable from the device, maybe an SD/MMC RAID of sorts).

Only, of course, if the latter storage method becomes price competitive, cheaper and as dense or denser than hard drives.

The major advantages could be durability and longevity because of no moving parts to break down.

Given the popularity of the iPod, maybe Apple could realize economies of scale quickly on the chip-based storage.

[rainman::|:|]

Originally posted by Rod Rod
Another iPod possibility is moving away from HD storage and into flash memory type storage (similar to SD/MMC/xD, but not necessarily removeable from the device, maybe an SD/MMC RAID of sorts).

Only, of course, if the latter storage method becomes price competitive, cheaper and as dense or denser than hard drives.

The major advantages could be durability and longevity because of no moving parts to break down.

Given the popularity of the iPod, maybe Apple could realize economies of scale quickly on the chip-based storage.

That's my hope as well, size stops being a factor then too-- they can fit gigs upon gigs into tiny little cards. unfortunately it will still be a year or two before this becomes even feasable... tho we can all see that HD is going to move solid-state soon, and no doubt Apple will be the first one out there incorporating it into their machines...

pnw

[snahabed]

Maybe I am way off, but outside of R&D costs, I would guess that the major cost of the iPod is the hard drive.

What else IS there? The processor, 1 bit screen, plastic casing? $100 seems too low, but I just don't buy that they couldn't do a $199 5-10GB and still maintain a decent margin. How expensive can a 10GB hard drive be now? It ain't cutting edge anymore!

I think Apple has a good pricing structure, it's just that an entry level model is missing. Price points of 199, 299, 399, 499 would be ideal, in my opinion (Maybe offer some iTunes downloads on the higher models, or discounts on accessories, to motivate people to go higher).

[Digipimp]

I think it's obvious the cost factor is the hard drive, the three models each share identical components with the exception of the hard drive size so it's not something else that's inflating the price between them. However it could be components that hold the price on the lower end of the models at a higher price.

Right now an entry model is $299 for 10 gigs which is a bit high considering what you get for it in the form of functionality. The design is great and top of the line, but to be competitive in the music and mp3 player biz in the future or to take the market totally to convince people who don't have mp3 players that they need them they will need to get cheaper on the lower end while retaining the high quality top end.

Already CompUSA was just selling refurb 15 gig 3rd gens for $199 so you know they can make it happen. Time to ante up on a 10 gig model that sells for $149 that maintains current functionality when the new ipods come out with new functions at higher price points.

[arn]

Originally posted by weev
"Celestial Jukebox"

Not heard of that one before. Anyone got more info on this future technology?

[/SIZE]

Everywhere Internet Audio: http://www.macrumors.com/pages/2003/09/20030924152101.shtml

[localman]

Still, $300 to $500 is an obstacle to a lot of people.
No, of course I don’t think it’s too costly. Fifty million homes have DVD players that cost that kind of money. For music lovers, I don’t think it’s a hurdle at all. There are sneakers that cost more than an iPod.

First off, DVD players can be had for $39 now. I just bought one for that price and it works great. They cost a lot less than $300 when they hit 50 million units.

Second, I know a load of music lovers who could never afford a $300 music device. These billionaires need to get their numbers straight.

Third, I work for a shoe distributor and I've never seen a pair of $300 sneakers. Some may exist, but that's not what most people are buying. Is that the type of market share he wants?

Some think you wouldn’t want to sell a $100 iPod because the profit margin would be so low.
What are you talking about? We’d love to have a $100 iPod! We just don’t know how to do it right now. We’re constantly trying to make cheaper iPods.

How about this: bring back the original 5GB version. I (and most of the world) wouldn't care if it's the new form factor. Toyota makes the Echo and the Avalon. Why can't Apple?

-- Sorry, I love my Apple gear and software, but you gotta admit that those geniuses can sure be stupid

[MikeL]

The iPod is not that expensive. If you're a kid or a student it might be a hurdle, but for what it is it's not unreasonable at all. It's targeted at people with large music collections. I've got thousands of dollars worth of music--a few hundred bucks to be able to keep it all with me and use any of it anytime I want? That's a no-brainer! If you can't afford an iPod, you likely can't afford the music to make best use of it. A flash-based player is probably the right thing for you, and they're only $50-$150. Add just a bit more dough, and you've got an iPod that gives you considerably more capability in a very superior package.

If you shop around, you can get an iPod for under $200. Apple sells refurbs every couple of months, and had one for something like $170 not long ago. CompUSA.com just had 30gb iPods for something around $250 this Friday. If you want something badly enough, you save and sacrifice to get it. Putting $10 aside a week will get you an iPod in a realatively short time.

As for Levy's Celestial Jukebox, he's just referring to the idea of on-demand music being delivered wirelessly whenever and whereever giving you access to anything anytime you like. Cell phone providers would love to do that, but the technology just isn't there yet.

None of that is the interesting part of the article, however. Jobs is making it pretty clear that the days of the meek, appologetic Apple are gone and that the company is ready to go to war again. I think it's damn cool to see Apple targeting a mainstream market with the intent to dominate it, rather than just settle for a small slice of the pie.

[Arcady]

I sure hope they don't come out with a $100 iPod too soon, because I just paid $400 for a 30gb iPod today, and it hasn't even shipped yet! (I still think it was a nice deal - same price as the current 20gb :D )

[MikeL]

Originally posted by localman
How about this: bring back the original 5GB version. I (and most of the world) wouldn't care if it's the new form factor. Toyota makes the Echo and the Avalon. Why can't Apple?[/B]

Because Toshiba doesn't make the 5GB drive anymore. Apple isn't the only company in the supply chain with a margin to protect, you know.

There's nothing new or surprising about this kind of situation. Suppliers are always revamping and restructuring their products in order to maintain their margins. Just because time and technology march on does not necessarily mean that a 5GB 1.1" drive is cheaper to produce. At some point it is nearly as expensive to make as the larger capacity models, and so the supplier simply stops making them. Demand dries up.

To put this in context, it'd likely cost Apple about the same to make a 5GB iPod (assuming, of course, that Toshiba would start production of the 5GB drive again) as it does to make a 10GB iPod. The idea is not to sell at a loss or to allow margins to erode.

[nightporter]

If you look at all the companies that have their fingers in the iPod pie you'll understand why the price is so high.

-----------------------------

One item that's invisible but indispensable is the iPod's operating system, which, I've been informed, is not of Apple design. PortalPlayer, a company that specializes in developing OSes for cellular phones, PDAs, and other streaming and wireless applications, designed the iPod's human interface. The iPod is so easy to use that it's obvious Apple chose the right company for the job.

Parts choices are said to have been made with an emphasis on sound quality, availability, and "time to market" considerations. Parts vetted include PortalPlayer's own MP3 decoder and controller chip, a Wolfson Microelectronics D/A converter, a Sharp flash-memory chip, Texas Instruments' IEEE1394a interface controller, and a Linear Technologies power-management and battery-charging system. The essential innard is the hard disk drive (HDD), which is amazingly tiny—a 1.8" Toshiba design built to fit Toshiba's PCMCIA cards.

The iPod's PCB is a marvel of parts density—so much so that I was almost completely at sea when confronted with it. The largest item, by far, is the Sony-Fukashima lithium-ion battery, molded to fit over the HDD. The back of the circuit board is dominated by the LCD display and the controls, which are attached directly to the board. The board's landscape is dominated by three large chips, presumably the buffer, CPU, and FireWire controller (the only item I'm sure of, since it's next to the 32-pin input). The rest of the board is jammed with surface-mount components.

Article (http://www.stereophile.com/showarchives.cgi?934:1)

[GregA]

Originally posted by nightporter
If you look at all the companies that have their fingers in the iPod pie you'll understand why the price is so high.

-----------------------------
<snip> The iPod's PCB is a marvel of parts density—so much so that I was almost completely at sea when confronted with it. The largest item, by far, is the Sony-Fukashima lithium-ion battery, molded to fit over the HDD. The back of the circuit board is dominated by the LCD display and the controls, which are attached directly to the board. The board's landscape is dominated by three large chips, presumably the buffer, CPU, and FireWire controller (the only item I'm sure of, since it's next to the 32-pin input). The rest of the board is jammed with surface-mount components.

Article (http://www.stereophile.com/showarchives.cgi?934:1) How much cheaper could Apple sell a car-radio sized iPod... I could go for one of them. A physically larger hard disk and no battery would make it cheaper. Make it removable so it can be placed next to your Mac for syncing occasionally (and preferably have a radio built in).

[MikeL]

Here's another good article about Apple's partnerships involving the iPod.

http://www.designchain.com/coverstory.asp?issue=summer02

[revenuee]

Originally posted by MikeL
Because Toshiba doesn't make the 5GB drive anymore. Apple isn't the only company in the supply chain with a margin to protect, you know.

There's nothing new or surprising about this kind of situation. Suppliers are always revamping and restructuring their products in order to maintain their margins. Just because time and technology march on does not necessarily mean that a 5GB 1.1" drive is cheaper to produce. At some point it is nearly as expensive to make as the larger capacity models, and so the supplier simply stops making them. Demand dries up.

To put this in context, it'd likely cost Apple about the same to make a 5GB iPod (assuming, of course, that Toshiba would start production of the 5GB drive again) as it does to make a 10GB iPod. The idea is not to sell at a loss or to allow margins to erode.

to bad, i'de snag a new 5 gig in a minute - looks like it's back to ebay for me :)

[jhershauer]

I'd like to see Apple come out with a sub-$150 flash-based "iPod junior" that they sell in addition to the current HD-based models. In addition to having it work seemlessly with iTunes as the current iPods do, a really cool feature would be to allow HD iPod owners to hook up their iPod junior to their iPod via the dock connector, and download the current on-the-go playlist to the flash-based player.

They might not have as big of a margin on the smaller, flash-based players, and may lose some sales of the more expensive iPods. However, they could make up for it somewhat by selling both devices to people like me, who would still want their whole collection to be portable, but want a small flash-based device for working out.

[revenuee]

Originally posted by jhershauer
I'd like to see Apple come out with a sub-$150 flash-based "iPod junior" that they sell in addition to the current HD-based models. In addition to having it work seemlessly with iTunes as the current iPods do, a really cool feature would be to allow HD iPod owners to hook up their iPod junior to their iPod via the dock connector, and download the current on-the-go playlist to the flash-based player.

They might not have as big of a margin on the smaller, flash-based players, and may lose some sales of the more expensive iPods. However, they could make up for it somewhat by selling both devices to people like me, who would still want their whole collection to be portable, but want a small flash-based device for working out.

Dude your definatly a thinker

nice 512 MB design would be sweet... oh well... we shall dare to dream

[SiliconAddict]

Originally posted by revenuee
Dude your definatly a thinker

nice 512 MB design would be sweet... oh well... we shall dare to dream

Nope. The solid state audio players out there are a dime a dozen. They have saturated the market. What makes the iPod unique is the ability to couple high capacity drives to a very slim and beautiful form factor. Honestly Apple doesn't need to compete against these other low end devices.

All they need to do is come out with a device that is in the $200 or less range. I don't know what the heck people on these boards are smoking but Toshiba sure as heck DOES still offer 5GB drives. They are PCMCIA based and actually consume less power then their laptop counterpart. Heck For a time I had one of these drives coupled with my iPaq pocket PC and PCMCIA sleeve. (In that case it was a 2Gb drive.) Looking at Toshiba’s site it appears that the 5GB retail price is $199. I’ll bet if Apple purchased these in quantity they could get a massive discount on them. While I highly doubt we will ever see a $100 iPod a $200 5Gb iPod would fit in perfectly. Try this on for size:

5GB $199 Small - For those who just want to carry a lot of music in their pocket on the go.

20GB $399 Medium - For those who have a large collection but don’t want to go bankrupt.

40GB $499 Large - For those who want everything on their iPod and don’t mind paying a premium.

*shrugs* I personally think this does a good job of covering all of apples bases.

[cb911]

having a cheaper model iPod would be awesome. the only reason i've got one is because i got the $300 rebate with iPod + PowerBook deal (although i'm still waiting on the cheque...:eek::rolleyes: ).

i really hope they can do that without sacrificing the quality of the iPod, but i doubt that would ever happen.

[mproud]

A solid and positive interview.

Wish there were more like these... though this was awfully short.

[howard]

they should just sell all the sizes of ipods..make it user costumizable, and have the 5g really cheap

[Shrike_Priest]

I thinkt that if they had the entry level model (10GB) at 199, the medium for 299 and the premium for 399, they would sell a LOT more iPods.

Price is pretty much the only factor holding people off on buying an iPod.

Lowering the price would bring sooo many more customers I think that Apple would still make a profit out of the price drop.

As a student, I can't really afford an iPod, but when I can get the 40GB one for 199, I'm going for it.

[billyboy]

If you want something bad enough you will find the money. As long as the iPod is the best piece of kit out there, and as long as the whole world continuously gets to hear about it through the universal iTMS, sales should go up up and away, and for the next couple of years at least, I think Apple would be crazy to be pressured into releasing a lower priced small, entry level iPod. As they make economies of scale, the margin on the current entry level iPods will rise, and then maybe the price of bigger iPods could come down slightly to lure people into buying bigger capacity iPods. But whatever they do they have to maintain their healthy margins, or improve on them if possible.

[adamfilip]

if they made a 3rd gen ipod thats 5 gig with a dock for $150 id buy it

i dont need 10+ gigs.

(it doesnt hurt..tho)

[Lancetx]

I bet that shortly after the holidays and before the Pepsi promo starts at the Super Bowl that we'll see a $50 or so price drop across the board. It's still not as low as people would like, but that's probably a reasonable amount to expect.

For months before I bought mine I balked at the price, but after actually getting one, I don't regret the money spent one bit. One thing that isn't appreciated enough is the fact you can use the iPod as a FireWire hard drive and I've found myself using that feature way more than I thought I would. For me, the 15GB model I have has been absolutely worth the $350 I spent on it.

[Photorun]

For each level, then they'd be considered reasonably priced, $199, $299, $399 and I'm sure they'd sell well. I had read in a couple places that iPods are almost 33% to 45% (bottom to top of line) profit. Just like most things Apple, there's huge profit margins, that's why they're 4.7 billion in the black where is, say, Gateway is deep in the red (or brown like cow poop). Jobs is a genius, but a maniacle greedy SOB, after all, most of HIS billions came during the hey day of the original Classic which each one sold was 1/2 all profit. Basically he's lying through his teeth, trust me, Apple's making a chunk of change, a rather big one on the 40 GB, probably about $200.

I picked up a refurb 10 GB second gen iPod from the Apple Store for $169. I was leary but it came in all new packaging, there wasn't a scratch on it, in fact, I showed it to people who thought it was all new. I've almost been thinking "refurb" meant someone had slide the box out of it's sleeve and back in, it's flawless. You can find some good deals and if every Apple refurb is as good as mine people should go forth and seek. There's deals out there. But I sympathise, I was holding out for $199 10 GB during a repricing, alas, typical Apple's (Jobs) high margins roll on.

[LinuxGigolo]

Originally posted by Rod Rod
[B]Another iPod possibility is moving away from HD storage and into flash memory type storage (similar to SD/MMC/xD, but not necessarily removeable from the device, maybe an SD/MMC RAID of sorts).
[--snip]

The major advantages could be durability and longevity because of no moving parts to break down.


The only problem with that solution is that flash memory doesn't last all that long (it can't be written to too much before it's useless). I recall a thread on slashdot about a Linux box booting from CompactFlash and using it for logging, and most of the comments about it was that it's a great idea, but the flash would be dead pretty quickly from all of that writing.

[tgrundke]

Also keep in mind that Apple has no real incentive to lower the price of the iPod at the moment. It is currently the best selling MP3 player and as long as quarterly results show the iPod to be *increasing* in marketshare, there is no reason to lower the price.

However, I think that Apple finally "gets it" when it comes to the marketshare/profit margin tradeoff. I think that the old days where Apple maintained 70% margins on products and an $11 billion revenue stream as a result are long gone. Products like iPod will steadily move down in price to compete.

But first, Apple has done the intelligent thing: built incredible value into the iPod. Sure it's more expensive, but you are getting such a superior product/user experience that currently the price is justified. When competition increases and prices fall, Apple will then (hopefully) be in a much better position to compete based on price.

[Wonder Boy]

Originally posted by ColoJohnBoy
Perhaps a 20 GB iPod for $100, a 40 GB for $200, and a 60 GB for $300. .

you cant be serious? those are over 50% price drops!

[themacolyte]

Originally posted by SiliconAddict
I don't know what the heck people on these boards are smoking but Toshiba sure as heck DOES still offer 5GB drives. They are PCMCIA based...

The iPod doesn't use a PCMCIA based drive. The form factor does actually matter. Honestly, I don't know if Toshiba still makes the 1.8" 5 GB drives but the fact that they sell a PCMCIA drive has nothing to do with the 1.8" drive.

[lmalave]

Originally posted by Shrike_Priest
I thinkt that if they had the entry level model (10GB) at 199, the medium for 299 and the premium for 399, they would sell a LOT more iPods.

Price is pretty much the only factor holding people off on buying an iPod.

Lowering the price would bring sooo many more customers I think that Apple would still make a profit out of the price drop.

As a student, I can't really afford an iPod, but when I can get the 40GB one for 199, I'm going for it.

Do you really think Apple is making at least 20% profit margin on the 40GB, 25% profit on the 20GB, and 33% profit on the 10GB. Those are *insanely* large profit margins in the electronics industry. Therefore, if Apple just lopped $100 off the price of each iPod model, they would be *losing* money with each sale. They would basically be taking a loss on the iPods in exchange for gaining more market share. But the iPods already have a 31% market share *and* are adding to Apple's profits, so I think Apple's marketing team has so far hit just the right balance.

[MoodMinefield]

I would DEFINETELY run out and get an iPod tomorrow if they came down some in price, and so would A LOT of my windows friends too.

It isn't like i am poor, far from it, but I still think the iPods are all overpriced, even being as fab as they are. If they dropped 100 in price across the line, or if apple introduced, as the threat indicated, a new "base" line of iPods maybe topping out at 200 bucks, they would be flying off the shelves! Just leave out some of the bells and whistles and you could do it. C'mon steve, you are so close to ruling the music world!

[macphoria]

I don't know about $100 iPod. $199 iPod sounds more reasonable and feasible.

[revenuee]

Originally posted by SiliconAddict
Nope. The solid state audio players out there are a dime a dozen. They have saturated the market. What makes the iPod unique is the ability to couple high capacity drives to a very slim and beautiful form factor. Honestly Apple doesn't need to compete against these other low end devices.

While I highly doubt we will ever see a $100 iPod a $200 5Gb iPod would fit in perfectly. Try this on for size:

5GB $199 Small - For those who just want to carry a lot of music in their pocket on the go.

20GB $399 Medium - For those who have a large collection but don’t want to go bankrupt.

40GB $499 Large - For those who want everything on their iPod and don’t mind paying a premium.

*shrugs* I personally think this does a good job of covering all of apples bases.

I wouldn't mind a release of a 2 gig version

But your absolutally right about the solid state mp3 players, apple does have an up on those

[NeoMayhem]

Originally posted by themacolyte
The iPod doesn't use a PCMCIA based drive. The form factor does actually matter. Honestly, I don't know if Toshiba still makes the 1.8" 5 GB drives but the fact that they sell a PCMCIA drive has nothing to do with the 1.8" drive.

Yeah they do....


Take a look inside an iPod:

http://www.kodawarisan.com/ug/ipod/index.html

That is for the 2G iPods, but the 3G use the same drives :P

[realityisterror]

i've always wanted an ipod, but being 13, is a major obstacle. heck, it took me 14 months just to save up for a $949 imac. i agree that there should still be a 5GB ipod. for me, my music and a back-up of my entire home folder is about 800MB. even 2.5GB would be plenty for me (for now) a price point of $149 on a 5GB would be awesome

reality

[Marianco]

The MP3 players which have comparable features to the iPod - e.g. small form, large hard drive, cost about the same as the iPod. The cost of the components drives the cost of the players. That's not going to change anytime soon. The cost of the harddrive itself, if you wanted to purchase it alone, is about the cost of the iPod itself.

Sure, there are cheap DVD players. There are also $150 basketball shoes.

$300 for an iPod is not too high a price for the pure enjoyment of listening to YOUR music wherever you are.

Get a second job or get a better job if you can't afford the iPod.

[revenuee]

Originally posted by Marianco
The MP3 players which have comparable features to the iPod - e.g. small form, large hard drive, cost about the same as the iPod. The cost of the components drives the cost of the players. That's not going to change anytime soon. The cost of the harddrive itself, if you wanted to purchase it alone, is about the cost of the iPod itself.

Sure, there are cheap DVD players. There are also $150 basketball shoes.

$300 for an iPod is not too high a price for the pure enjoyment of listening to YOUR music wherever you are.

Get a second job or get a better job if you can't afford the iPod.

well change that into Canadian and your now paying 437 for an ipod

I've got tuition and living expenses to pay for, and there are only so many hours in the day to work and study.

[dongmin]

If it were 100 bucks lower, I would buy it tomorrow. Really??


Perhaps a 20 GB iPod for $100, a 40 GB for $200, and a 60 GB for $300. Only time will tell, but if they can figure out how to drop their prices, Apple's market share of MP3 players wil skyrocket. Genius!


Or maybe at the next ipod product update they could do it like this: 10GB: $149, 20-30GB: $249, 40-60GB: $349. Or something like that...If the 10GB ipod's price was that low I'd pick it up in a heart beat. Brilliant!


they should just sell all the sizes of ipods..make it user costumizable, and have the 5g really cheap You don't say?!


I thinkt that if they had the entry level model (10GB) at 199, the medium for 299 and the premium for 399, they would sell a LOT more iPods. So let me get this straight. if they LOWERED the price, they'd sell more??? Amazing!


if they made a 3rd gen ipod thats 5 gig with a dock for $150 id buy it True dat.


$100 less Hooray!


I don't know about $100 iPod. $199 iPod sounds more reasonable and feasible. Wise words.

[Phinius]

Originally posted by MikeL
Because Toshiba doesn't make the 5GB drive anymore.

Toshiba still makes the 5GB 1.8" hard drive and there is also a 15GB drive. Apple is simply keeping the iPod as a premium priced product.

Where is there a rule that states the iPod has to have a hard drive? Apple could make a digital music player Apple for considerably less without using a hard drive and attract a much larger customer base. As of yet Apple has chosen not to do that. If Apple continues to only sell highend portable digital music players, then other companies, with much lower prices, will push Apple into a small niche eventually. Look at what happened with CD players. How many $300 or $400 portable CD players do you see in stores? Or notice what happened to recordable video and DVD player sales when entry level prices moved to under $100, sales exploded.

[Phinius]

Originally posted by themacolyte
The iPod doesn't use a PCMCIA based drive. The form factor does actually matter. Honestly, I don't know if Toshiba still makes the 1.8" 5 GB drives but the fact that they sell a PCMCIA drive has nothing to do with the 1.8" drive.

Toshiba still makes the 1.8" 5 GB embedded hard drive and Apple could still use it, but Apple chose to go with only a slimmer iPod selling at higher prices.

[Dippo]

I would certianly pay $199 for an iPod, but I don't listen to music enough to justify $299 for an iPod.

If Apple doesn't want to lower prices, they should improve the iPod to come inline with prices. If Apple could just add video playback to the iPod, I could justify up to like $500 for it then.

I know this idea has been beat to death, but it is the obvious evolution for the iPod.

[fpnc]

IMO, Apple could produce a lower priced iPod-like device right now (similar to the flash-memory based players). However, they may be holding back because a device like that would cannibalize a certain percentage of sales from their higher-price models. So, I suspect that they are watching market share, profit margins, and buying trends and waiting until a crossover occurs that would allow them to offer lower-priced products while at the same time increasing total profits.

However, if they are holding back I think this may be a bad idea. If Apple wants to remain a major player in the portable digital player market they need to make the AAC music format as popular and pervasive as possible. The only way to do that over the long term is too offer AAC-compatible players that compete over a full range of prices. If they don't do that and WMA grows to dominate the playback market (in set top players, portable players, number of encoded songs available on-line or total number of songs in user's hands) then the iPod could begin to slip into irrelevance. After all, it's the music that makes the iPod worth having. So just as the wide availability of Windows software makes the PC dominate so will music availability make or break any digital audio playback device. So, what we need (or what Apple needs) are AAC compatible devices at price points between $100 and $200. I think they'll need such devices very soon (like yesterday) and in another year the price should be under $100. Whether these are introduced by Apple or by a third-party is probably unimportant (in fact, a third-party might be more desirable), but AAC playback has to become available at all price points.

Oh, I know that the iPod can play MP3's and that MP3 is probably the most popular format today (by far), however I think the next battleground is going to be WMA versus AAC, and AAC needs to remain strong if Apple wants to continue in the music playback business. Either that or Apple should just convert over to WMA and then the question of music availability and choice becomes mute (then just let the "best" music player win).

[ColoJohnBoy]

Originally posted by dongmin
If it were 100 bucks lower, I would buy it tomorrow. Really??


Perhaps a 20 GB iPod for $100, a 40 GB for $200, and a 60 GB for $300. Only time will tell, but if they can figure out how to drop their prices, Apple's market share of MP3 players wil skyrocket. Genius!


Or maybe at the next ipod product update they could do it like this: 10GB: $149, 20-30GB: $249, 40-60GB: $349. Or something like that...If the 10GB ipod's price was that low I'd pick it up in a heart beat. Brilliant!


they should just sell all the sizes of ipods..make it user costumizable, and have the 5g really cheap You don't say?!


I thinkt that if they had the entry level model (10GB) at 199, the medium for 299 and the premium for 399, they would sell a LOT more iPods. So let me get this straight. if they LOWERED the price, they'd sell more??? Amazing!


if they made a 3rd gen ipod thats 5 gig with a dock for $150 id buy it True dat.


$100 less Hooray!


I don't know about $100 iPod. $199 iPod sounds more reasonable and feasible. Wise words.

Thanks you for your sincere contribution. I know I appreciate it. ;)

[Jerry Spoon]

Originally posted by snahabed
I think Apple has a good pricing structure, it's just that an entry level model is missing. Price points of 199, 299, 399, 499 would be ideal, in my opinion (Maybe offer some iTunes downloads on the higher models, or discounts on accessories, to motivate people to go higher).

I don't know if you'd even need to offer the incentives for the higher priced models b/c I think as soon as you got your low priced 5GB ipod, you'd fill it, sell it, and buy a bigger one. That's already happening w/ the current available models.

[the_dalex]

Apple's strategy has never been "drive prices lower," but rather "drive specs higher." This has held true for all of their product lines... when they update, they just make the product bigger (or smaller), better, faster and keep the price point the same (before you nitpick, yes, I know there have been exceptions). It has worked VERY well and has kept them as a premium brand. Discounting a product discounts your brand, and Apple will never do that.

I personally don't believe that they want to sell a $100 iPod, just like they don't want to sell a $500 desktop. It's not their strategy. If they wanted to hit that price point that badly they would make a flash-based player, but that would be a bad move for several reasons.

I want a BMW 5-series for $15,000. They would sell a lot more at that price, and I would buy one, so they're stupid for not doing it! :rolleyes:

[duffyb]

Actually, there was a segment on TechTV which pointed out that per MG (or GB) the iPod is the cheaoest player out there.
Something like .012 per KB

[Danger! Will]

I'd buy a new iPod for $199.
Even with my student discount at it's current lowest price it's $269.
I'd rather use the $69 extral dollars to download music from the windows iTunes music store.

[idkew]

I think everyone is missing a HUGE point here. The iPod is not designed for people who steal music. It is designed so people can bring their entire legal music collections with them. The price points, while expensive on the surface, are tiny in comparison to the cost of the music to fill them.

Think about it- the 40GB model can hold nearly 10,000 songs. At 99¢ a piece, that is $9,900. Even if a consumer was able to purchase songs at 50¢ a piece, it still costs $5,000 to fill an iPod. What is another few hundred dollars when you are already spending several thousand?

The $300 iPod still will cost $1,250 to $2,500 to fill. What is $300 in in nearly $3000? Bit more than 10%, or a little more than tax on most purchases. The ratio drops as you get a larger iPod. $500 (40GB model) of $10,000 is only 5%, or less than the tax you would usually pay for an item.

Everyone complaining about the cost of an iPod needs to stop stealing their music. Plain and simple. Sure, Apple has premium pricing, but it is not excessive when you factor in what the iPod is designed to do; play LEGALLY PURCHASED music.

[Danger! Will]

idkew

I think your missing a point. Not everyone has their music collection because of the iTunes music store. I'm 26 years old and have been buying cd's as a long as i can remember. So if I buy an ipod now and fill it with 1000 songs it's not going to cost me $990 plus tax. The music is allready mine. Not everyone has stopped buying cd's.

[idkew]

Originally posted by Danger! Will
idkew

I think your missing a point. Not everyone has their music collection because of the iTunes music store. I'm 26 years old and have been buying cd's as a long as i can remember. So if I buy an ipod now and fill it with 1000 songs it's not going to cost me $990 plus tax. The music is allready mine. Not everyone has stopped buying cd's.

Yes, BUT you did purchase that music at one point, and at an average price of $15 or more and album of maybe 8 songs, so you sill have QUITE A BIT invested in your music. Your iPod is still inexpensive in comparison to your CD colection.

[Prom1]

Ok HOw many of you original iPod (FireWire) owner's are participating in this thread? Did you forget that the iPod isn't just for music?? When it debuted It was swweett that you could connect it via FireWire and mount as a Hard-Drive This alone validates the iPod's premium prices. Off my rocker do you say?? Well just remember that flash based USB drives do-not offer, currently, 1GB or even 5GB size so that's the premium price taht gives you that ability. Not sure if iPod's will mount as external removable drives like USB drives on Windows; but I think that they do.

Also, Name one other competing portable jukebox that offers calender and phonebook that can synchronize with your Outlook or MusicJukeBox on the desktop like the iPod can; not to mention Battery life and games as well!!

Anyone???

[Phinius]

Originally posted by GregAussie
How much cheaper could Apple sell a car-radio sized iPod... I could go for one of them. A physically larger hard disk and no battery would make it cheaper. Make it removable so it can be placed next to your Mac for syncing occasionally (and preferably have a radio built in).

Apple would greatly expand iPod sale if there was a model made as a OEM or aftermarket player for automobiles. Afterall, the majority of music that people listen too in a day is accomplished while driving around in their cars.

[agentmouthwash]

I know 4 people that would love to buy an iPod, but $299 is way too much money, so they are looking at alternatives. A $199 5GB iPod would do the trick. They know how much better iPods are then the other mp3 player, but they can't afford it, plus they don't need 10Gb.

Apple is missing out on this market.

[Macco]

Originally posted by snahabed

What else IS there? The processor, 1 bit screen, plastic casing?
Ugh. It's at least a 2-bit grayscale screen, as you can see in the back of the Solitaire cards and in the empty slots on the battery charging icon when the iPod is sleeping. People get this wrong so often.

[iMeowbot]

Originally posted by Phinius
Apple would greatly expand iPod sale if there was a model made as a OEM or aftermarket player for automobiles. Afterall, the majority of music that people listen too in a day is accomplished while driving around in their cars.

A well made in-dash iPod dock with driver-friendly controls would be a nice thing to have. Slide it into a cassette-like slot and have remote controls on the faceplate.

I don't think that a permanently dash-mounted iPod is practical in the short term. I sure wouldn't want to have to take a notebook out to the car to load music (or keep a 75-meter network cable handy!), and wireless networking is still a bit immature, especially at speeds that would make large transfers bearable.

Another advantage to going with a dock would be to keep the cost of that part down. The support issues get interesting and expensive with anything that a customer might want to install in a dash.

[idkew]

Originally posted by iMeowbot
A well made in-dash iPod dock with driver-friendly controls would be a nice thing to have. Slide it into a cassette-like slot and have remote controls on the faceplate.

I really think this is a nice idea- we have a dock for home use, even a "loud speaker" dock for light headphone-less listening. Maybe Belkin can team with Apple and make this third way of listening- an in dash car dock. Sure there are other ways of doing this, but the FM transmitters do not sound great, and the tape adapters are getting obsolete.

Plus, as a simple dock, theft would be less of a concern since most of the expensive circuitry and data storage are removable.

I would definitely be in the market for this solution.

[topicolo]

One interesting thing I remember reading about in a Fortune magazine article about Apple is that they apparently make as much profit from an ipod as an imac.

Thems fat margins!

[singletrack]

$199 iPod. Sure, that's going to happen.

Do people actually look at the prices of the competition before demanding Apple lower prices? Creative's NOMAD Zen and Jukebox HD players are $299 and up, and have less features. The base model has a bigger disk for the money but it's certainly no iPod in the feature stakes. Rio's are $399.

There's cheaper players using bigger hard disk and cheaper components with even less features eg. Archos.

The only way Apple will get a cheaper player out is to do a non-hard disk model and that seems to me to be filling a price point rather than a feature set people would be happy with - 1.5GB max RAM is no substitute for a hard disk.

[dongmin]

Originally posted by iMeowbot
I don't think that a permanently dash-mounted iPod is practical in the short term. I sure wouldn't want to have to take a notebook out to the car to load music (or keep a 75-meter network cable handy!), and wireless networking is still a bit immature, especially at speeds that would make large transfers bearable. Bingo. Someone with some sense. What's the point of having a built-in dash mp3 player when you can have a portable one that you can use anywhere? All you need here is a dock that connects to your car stereo, like an iMotion for the car.

[SiliconAddict]

Originally posted by tgrundke
Also keep in mind that Apple has no real incentive to lower the price of the iPod at the moment. It is currently the best selling MP3 player and as long as quarterly results show the iPod to be *increasing* in marketshare, there is no reason to lower the price.



It should be interesting to see what price point the Dell Jukebox comes in at. If they seriously undercut the pricing structure Apple has for the iPods it could force them to drop their prices.
The dell offering may not be as pretty as the iPod but if it saves the consumer (guess:) 50$-$100+ on a device that sole purpose is to play music then does it really matter?
Also keep in mind that there are now rumors that HP is also entering the portable music device arena (There have been few places Dell has gone where HP hasn't followed.) This could further complicate things for Apple if HP and Dell get into a price war. This is exactly what happened on the Pocket PC front. Back in 2000-2002 Pocket PC’s were running aprox $450-$700. Along comes dell with price ranges in the $250-$299 undercutting everyone else forcing them to drop their prices. Consequently you have most Pocket PC’s today in the $230-$500 range max.
Apple may have no choice but to drop their prices in the long run. At least if they want to maintain that 30% of the market. The iPod IS something special but that doesn’t mean people wouldn’t choose something cheaper if given the chance.

[asphalt-proof]

The only way Apple will get a cheaper player out is to do a non-hard disk model and that seems to me to be filling a price point rather than a feature set people would be happy with - 1.5GB max RAM is no substitute for a hard disk.
--------------------------------------------------

I agree: Flash-based mp3 players are really not that cheap when you compare how much music you can put on them. In fact, they are expensive for the amount of storage available. It still cost you at least $70 for a 128mb MP3 player. That will get you about two CD's on it maybe 3. Fine for working out but that doesn't seem to be the demographics the iPod is hunting for.

Everybody wants cheaper prices... its the American way. I have to agree with those who say that if you really want it you will find a way to pay for it. Its all about priorities. Nobody will die if they don't get one and the earth want spin off orbit into the sun if Apple doesn't meet the price point of everyone. I'm sure that Apple could produce a 60gig iPod for $200 with all the accessories and somebody would complain that it cost too much. Get over it! Life is made of needs and wants and an iPod is definately not a need. (By the way, the buy-a-bundle program earlier this Fall was a great deal.. I got my iPod with educator discount for $69. So yes Virginia there is a Santa Claus.) Sorry for the acerbic reply. As a school psychologist its my job to make everyone feel warm and cuddly but sometimes people tick me off with their "I deserve it attitude".

[SiliconAddict]

Originally posted by singletrack


Do people actually look at the prices of the competition before demanding Apple lower prices? Creative's NOMAD Zen and Jukebox HD players are $299 and up, and have less features. The base model has a bigger disk for the money but it's certainly no iPod in the feature stakes. Rio's are $399.

Yes we do.. Small tip: do your homework before spouting such garbage.

Even then you are missing the point. People looking for cheaper devices will simply bypass the iPod because of price and skip to CF, SD players which are hundreds cheaper then the cheapest iPod. Getting a $199 iPod on the market would get people on the fence to jump to the iPod.

[singletrack]

Originally posted by SiliconAddict
Yes we do.. Small tip: do your homework before spouting such garbage.


I was quoting the manufacturers prices from their own websites. Yes I've done my homework.

What retailers choose to quote is up to them, not Apple however it does seem that retailers choose to keep the price up rather than discount to sell. I presume that is because people still see the iPod as being worth the money, they can sell them and they are selling increasing numbers.

FYI, The RRP for a Toshiba 5MB player is $349 http://www.tacp.toshiba.com/digitalaudio/product.asp?model=MEG50AS

I can't imagine anyone wanting one of those at that price when they can have an iPod or NOMAD Zen for less. I imagine that, and the bad reviews it gets, is why it's being discounted so heavily.

[Kirtus]

When I can afford it I will buy the iPod no matter what the price. Quality is what I care about and the iPod is in a word QUALITY!

[iPC]

Originally posted by tristan
I think it was a dumb question by the interviewer. The miniature hard drive alone costs around $100, so you're really not going to see a $100 ipod anytime soon.

Anyway, Apple considers itself a premium brand, and generally prices its products a little higher than the competition. It's like asking Louis Vitton if they'll come up with a $20 handbag. Even if they could do it, it wouldn't have the quality that you'd expect.

I think Apple's prices get out of hand sometimes. I almost bought an airport last week - almost - then I found a 4 port wireless hub/router for $30 after rebate. Sure, the airport's better, but if something will do the job for $30, it's hard to justify spending $200. (Especially in a recession.)
How is the ariport better? If it was, isn't the cost justified? Obviously not.....

[jettredmont]

Originally posted by idkew
Yes, BUT you did purchase that music at one point, and at an average price of $15 or more and album of maybe 8 songs, so you sill have QUITE A BIT invested in your music. Your iPod is still inexpensive in comparison to your CD colection.

And that must be why the >$500 CD player market is so dang hot these days!

Yes, $300-500 isn't a lot of money in the Big Picture sense. I mean, you've got to have a PC of some sort to use it anyways, and that most likely cost significantly more than $500 too. And you probably have a house in which your computer is sitting which cost hundreds of thousands of dollars, or else you use your computer at work in an office rented for thousands of dollars a month ... Still, though, you can enjoy your music collection without the iPod, your computer runs without the iPod, and your house still miraculously stands without an iPod inside.

The iPod is an investment, and is either worth it or not based on its own merits.

[Rod Rod]

Originally posted by singletrack
I was quoting the manufacturers prices from their own websites. Yes I've done my homework.

What retailers choose to quote is up to them, not Apple however it does seem that retailers choose to keep the price up rather than discount to sell. I presume that is because people still see the iPod as being worth the money, they can sell them and they are selling increasing numbers.

FYI, The RRP for a Toshiba 5MB player is $349 http://www.tacp.toshiba.com/digitalaudio/product.asp?model=MEG50AS

I can't imagine anyone wanting one of those at that price when they can have an iPod or NOMAD Zen for less. I imagine that, and the bad reviews it gets, is why it's being discounted so heavily.

Retailers do not choose to keep the price of Apple products up. They are contractually compelled by Apple to list prices at the Suggested Retail Price. Your presumption is mistaken. The biggest deviations from Apple's SRP are on the order of $5. MacMall, which sells Studio Dislplays for $50 less than SRP, can only do so as a "shopping cart special," which is different than listing the lower price up front.

The heavy discounts on non-Apple products are there because the other manufacturers give resellers a lot more freedom in pricing.

[jayscheuerle]

For its limited ability, the iPod is not a wise investment of $300+ dollars for me. I'll never have that much money to spend on a glorified Walkman™. If I ever do get a non-CD based mp3 player, it will be under $100.

I also need to update my beige G3, but even the used G4 market is obscenely priced. The eMac and iMac are not options for me. From an Apple II+ to a Mac Classic and a 6100, I've been an Apple user, but Apple's pricing me out of their entire ballgame. It's a shame, because I really like OSX, but if my beige box would die tomorrow and I could only pull together $500, then only the most meager of upgrades (ones where I'd barely notice a performance difference) would be affordable on the Mac side.

[Kid Red]

Apple couldn't put the 5 gig on the streets today for $100?? Come on now.

[SiliconAddict]

Originally posted by Kid Red
Apple couldn't put the 5 gig on the streets today for $100?? Come on now.

Sure they could....but not without taking a hit in profits. A 5 GB drive alone is going to cost at least $100. Now couple a battery to that, and an ARM, CPU, LCD, ROM chips, suport boards, USB2/firewire controller, etc and you get something above $100

Now maybe $200. :confused:

[Kid Red]

Originally posted by SiliconAddict
Sure they could....but not without taking a hit in profits. A 5 GB drive alone is going to cost at least $100. Now couple a battery to that, and an ARM, CPU, LCD, ROM chips, suport boards, USB2/firewire controller, etc and you get something above $100

Now maybe $200. :confused:

Really? Even being so dated now? I figure the value of the drives would have dropped a lot by now. Plus, if i were Apple, I'd assume they could drop a serious amount of $100 iPods and getting a bulk rate from their suppliers.

[singletrack]

Originally posted by Rod Rod
Retailers do not choose to keep the price of Apple products up. They are contractually compelled by Apple to list prices at the Suggested Retail Price. Your presumption is mistaken. The biggest deviations from Apple's SRP are on the order of $5. MacMall, which sells Studio Dislplays for $50 less than SRP, can only do so as a "shopping cart special," which is different than listing the lower price up front.

The heavy discounts on non-Apple products are there because the other manufacturers give resellers a lot more freedom in pricing.


This practice is ILLEGAL in Europe and I'd have thought so in the USA also but if you say otherwise then consider me enlightened.

In Europe the retailer is free to sell products at any price they feel is appropriate. If Apple pulled their account because the retailer was discounting the product then the retailer could take them to court.

Apple products aren't discounted because they are good products that people are prepared to pay premium prices for and retailers would rather have a big margin than sell low-margin products if they can. They can get by with lower margins on PC products because of volume.

[Mac Dummy]

Originally posted by Rod Rod
Another iPod possibility is moving away from HD storage and into flash memory type storage (similar to SD/MMC/xD, but not necessarily removeable from the device, maybe an SD/MMC RAID of sorts).

Only, of course, if the latter storage method becomes price competitive, cheaper and as dense or denser than hard drives.

The major advantages could be durability and longevity because of no moving parts to break down.

Given the popularity of the iPod, maybe Apple could realize economies of scale quickly on the chip-based storage.

I just found out about the MPIO FL100, its a Korean made flash based MP3 player that comes in either 128MB, 256MB or 512MB sizes with a SD card slot for added storage. I was reading some reviews @ Amazon.com and they seemed positive, I recently saw this player at Best Buy as well.