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I have very reliable sources that Apple is introducing a new ipod. The only thing about this ipod the person could tell me is it is going to be the biggest one yet. It will be able to hold a crazy amount of songs.

Whoa, no kidding?
Those are really extreme and disputable points...
I hope you won't be C&D'ed by Apple Legal for leaking this.
 
I think it won't have wifi just because apple will want to allow for many generations of updates that can occur fairly quickly. Having the 5.5G update where people were disappointed and then waiting an entire year for the next one, I think this will be a huge overhaul, but I think that the switch to OSX and the multi-touch will do that and carry them through the holiday season. Then without the need for too much inovation, they can add wifi, or even work with AT&T to provide edge/3G service for the internet communicator part of the device in early 2008. Having back to back major updates like this will give them much more buzz and press than putting it all into one single update.
 
Seeing as how the most popular iPod is the nano, i don't think too many people would see it as a reason to ditch the nano and go full size iPod...unless..they somehow revamp the nano...sell another gazillion of those...commit to focusing on that form factor and the iPhone...and begin the phasing out of the full-sized ipod...

Yeah, that's a good point. It's basically giving people more of what they don't need (for most people, that is.)

I am wondering how much extra appeal a bigger screen gives the full-sized iPod, if most people are still buying Nano's. Not that people are clamoring for other features either, but would Apple include stuff like creating and editing contacts and notes in the touchscreen iPod, given they are purely supplemental features and does not require any additional development costs (actually perhaps less, since they'd just be copying the iPhone app instead of porting over the old read-only apps from the iPod)? I used to have a PDA to jot down notes and ideas, and would personally like having it on a touchscreen iPod.
 
In such a scenario, I think the 'fat nano' is the true successor to the 5.5G iPod, and would be priced starting at $249 or $299.

Then you could put the iPod Touch starting at up to $399, and still cover the entire price range.

I agree that if there is not a new flash-based player, then there would be a price hole.

Hm I agree, the fatpod needs to be priced a bit under what the current ipods are priced at, but more than the nano. The iPod touch should be priced at a bit over what the current iPods are.

So,
shuffle 2gb- $79
nano 4gb- $149, 8gb- $199
fat nano 8gb- $249, 16gb- $349
iPod touch- 60gb $389, 120gb $459
 
I read your statement. Why wouldn't Apple's overall profitability from ALL product lines be relevant to this discussion, if we're talking about what might or might not make sense to Apple?

If you think it makes no sense at all then you are not comprehending my points. Try again.

Never said it was irrelevant to Apple.
 
I read your statement. Why wouldn't Apple's overall profitability from ALL product lines be relevant to this discussion, if we're talking about what might or might not make sense to Apple?

I'm not going to re-explain it for you, sorry. I think I was quite clear the first time around.
 
I'm not going to re-explain it for you, sorry. I think I was quite clear the first time around.

It was clear, I simply disagree. I understand your point about the importance of the iPhone to Apple. I just disagree that iPod revenue is irrelevant to your point. It's always relevant, I guess you just don't think it's as critical a factor as iPhone at this point.

I think both product lines are going to be in flux over the next couple of years, as Apple sees which way the markets and customers go.
 
It's irrelevant because iPod sales at the expense of the iPhone would not be any sort of positive for Apple at this juncture. The risk Jobs has taken with the iPhone is too great to be dicking around with it so early in the game. Hope that makes it clear enough.
 
Yeah. I thought you were making some sort of blanket statement. But it's a good point

It's irrelevant because iPod sales at the expense of the iPhone would not be any sort of positive for Apple at this juncture. The risk Jobs has taken with the iPhone is too great to be dicking around with it so early in the game. Hope that makes it clear enough.
 
Once — which is to say, if — the iPhone gets a firm foothold in the marketplace (or alternately, if it ultimately fails) then we will likely see more iPhone-like features on the iPod. At this point, though, the general consensus on the iPhone is that it's still too early to tell.
 
used to have a PDA to jot down notes and ideas, and would personally like having it on a touchscreen iPod.

me too. I use my 5G iPod as a half-assed PDA...it is synched to my ical and address book, which is very useful. But every morning i get up...i turn my mac on, hook up my ipod, edit my iCal and jot down notes i need for the day, synch my iPod and go from there. I wish i could enter iCal events/contacts/notes on my iPod AND have over 30gigs of space. Wifi/Safari would be nice, but give me just the PDA functions, and I'd be pretty happy. I really don't want to have to buy an iPhone to have this basic functionality.
 
Once — which is to say, if — the iPhone gets a firm foothold in the marketplace (or alternately, if it ultimately fails) then we will likely see more iPhone-like features on the iPod. At this point, though, the general consensus on the iPhone is that it's still too early to tell.

Yeah, I'm pretty much all with you there. I just got a little ahead of myself and read your post too quickly.

me too. I use my 5G iPod as a half-assed PDA...it is synched to my ical and address book, which is very useful. But every morning i get up...i turn my mac on, hook up my ipod, edit my iCal and jot down notes i need for the day, synch my iPod and go from there. I wish i could enter iCal events/contacts/notes on my iPod AND have over 30gigs of space. Wifi/Safari would be nice, but give me just the PDA functions, and I'd be pretty happy. I really don't want to have to buy an iPhone to have this basic functionality.

I do too (or did until I sold my 5G). I would just love to be able to create and edit notes on a touchscreen iPod. I found the iPhone keyboard to not be objectionable at all (much more enjoyable than say pulling out a stylus and entering Palm Graffiti.) I think this would be a more likely addition, because it is such a supplemental, minor feature. And it might make sense to consolidate the 2 products in this limited regard, if they both run OS X.
 
I hope there is wi-fi, but I agree. Apple put too much on the iPhone to suddenly few months later have a product similar like the iPod with wi-fi. So I think it won't happen for awhile until the iPhone becomes a major player on the cell market.
 
I work at Radioshack and my manager told me that we will be clearancing out all of our iPod and iPod nano cases this week to make room for the new iPod. This leads me to believe that the new nano and full-size iPod will both see significant form-factor changes. This update is going to be HUGE.

I agree with Don Bagles 100%. Wifi is a must. Bring it on Apple!
 
I honestly don't care about WiFi. I just want a screensize similar to the Zune so I can have larger album art than my 4G iPod Photo. I also want the video capability since I've been holding out waiting for a REAL iPod with video. The other versions are a ripoff if you ask me. They're a great deal as JUST a music player. I mean, I paid $320 with a student discount for my 30 gig iPod Photo. Granted, it was the first iPod with album art and color, so it definitely had a large price hike from the previous versions. So if you were buying a 5G or 5.5G just for the music, it's a great deal since the 30 gig is $250. Having said that, as a video player the 5 and 5.5 gen iPods are too small. End of story.

Another thing I want is more storage. My iPod holds 27.5 or so gigs and at the moment I have around 22-23 gigs so I am running out of space. A 100+ gig iPod would be awesome for me. I could put a few movies on there and more importantly my ever-increasing music collection won't necessarily run out of space on the iPod. Back to what I was saying about the Zune. One of my friends has a Zune and it makes the iPod's album art look like crap to be quite frank. The iPod is long overdue for a nice update in this department. The cover flow image on the Sept. 5 invitation is certainly a great indication that they are finally going to give a better album art function to their loyal consumers.
 
I hope there is wi-fi, but I agree. Apple put too much on the iPhone to suddenly few months later have a product similar like the iPod with wi-fi. So I think it won't happen for awhile until the iPhone becomes a major player on the cell market.

An iPod with Wi-Fi is NOT similar to the iPhone!

It doesn't make phone calls, it doesn't have a phone number, it only surfs the internet in a hot spot, just like a MacBook.

I've said this before. If someone is going to buy the iPhone, an iPod with Wi-Fi is not a reasonable alternative for them, if they need a phone. The Wi-Fi is simply an added feature to make people who wouldn't have bought EITHER product, want the iPod.
 
Pardon me if this has already been discussed, but are we all taking for granted that there will be a fat, ugly, iPod Nano?
 
I've said this before. If someone is going to buy the iPhone, an iPod with Wi-Fi is not a reasonable alternative for them, if they need a phone. The Wi-Fi is simply an added feature to make people who wouldn't have bought EITHER product, want the iPod.

Don, you can say it all you want, but to me:

wifi iPod w/PDA functions and Safari + Nokia 6030 (gmail,gmaps,news,sports scores, all on the go) = iPhone + 30gig 5gen iPod.


seriously dude, some people just don't agree with you. get over it.
 
A rather lengthy economic analysis of the cannibilization of iphone sales

In my last post, I focused on the portable electronics market and how the new ipod could fit into that as a Portable Media Player (https://forums.macrumors.com/showthread.php?p=4114327#post4114327) , as well as on Apple’s long-term opportunities. Right now, everyone’s focus seems to be on how the ipod could cannibalize the iphone, so I thought I’d shoot out an economic analysis of the gains and losses associated with a WI-FI ipod.

REMEMBER: THIS IS AN ECONOMIC MODEL, THAT, LIKE ALL ECONOMIC MODELS, IS SIMPLIFIED TO CAPTURE THE CENTRAL POINTS. IT IS MEANT TO BE A STARTING POINT, NOT AN ALL ENCOMPASING ANALYSIS.

First, it’s good to set the parameters. If the Ipod only has a full-screen and multi-touch, it will cannibalize a relatively insignificant part of the iphone market (compared to the huge sales it will generate). Those who will buy it over the iphone (those who would not buy the iphone otherwise are irrelevant to cannibalizing the iphone market) value the video and storage of video features as the paramount upgrade, and one that would mean shelling out $500 (probably $600 if they like storage so much) for a device whose other features they find relatively insignificant (otherwise they would stick with the iphone regardless). If they didn’t value the video so much, then they would just buy/keep a high-storage ipod. On the other side, anything more than WI-FI would be either a) a cell phone (which they already have) or b) a much expanded Portable Music Device, which would leapfrog the ipod (they probably aren’t there yet, but it would cost a lot and generate plenty of revenue to offset lost iphone sales).

So, it is the WI-FI that is the central issue of cannibalization. What we have to do is imagine two worlds, one with WI-FI ipod and one without, comparing the difference between the two. One of the categories of differences is long-term strategy, which I touched on in my last post. The other is cannibalization of sales which is important not in terms of total sales (that Could fall under grabbing market share and the strategy category) but in terms of profit.

(Summaries of the math will be in bold)
For Apple to add WI-FI to generate more profit, its additional sales of iPods times the profit per iPod (plus change in profit margins total) compared to the world without WI-FI would have to be greater than the lost number of iPhone sales times their profit PLUS the profit that Apple gets from AT&T (which could get the raw end of the deal because Apple doesn’t care about their AT&Ts profit beyond how it effects their strategy). Summarized (taking non-touch ipods out of the model for simplicity and because there is less overlap. A substantial increase in ipod touch with WI-FI price over without WI-FI could push people to cheaper players, but that’s really too complex for now):


World WITHOUT WI-FI iPod (World A):
Total iPod profit = (new iPods sold) X (profit per iPod)

Total iPhone profit = (new iPhones sold) X (profit per iPhone + profit per AT&T contract)

Total profit = (total iPhone profit) + (Total iPod profit)



For them to (profit-wise) add Wi-Fi, then the increase in (Total iPod profit) would have to be greater than the decrease in (Total iPhone profit) so (Total profit) would be greater (duh, I guess).


Difference in world WITH WI-FI iPod (World A):
---note, prices would likely change, profit per iPod could increase (likely) or decrease

(Total iPod Profit of World B) = (Total iPod profit of World A) + (increase in iPod sales) X (new profit per ipod) + (original total ipod sales) X (difference in profit per ipod)

Basically—the profit from selling more ipods plus the additional (or perhaps less) profit per ipod would be the increase in total iPod profit by adding a touch-iPod.

(Total iPhones Profit of World B) = (Total iPhone profit of World A) + (decrease in iPhone sales) X ((profit per ipod) + (profit per AT&T contract))

Basically—the loss of profit from selling fewer iPhones would be the decrease in total iPhone profit by adding a touch-iphone (sort of obvious, but just following the math).

So, for World B to be better:

(increase in iPod sales) X (new profit per ipod)
+ (original total ipod sales) X (difference in profit per ipod)
>(absolute value) of
(decrease in iPhone sales) X ((profit per ipod) + (profit per AT&T contract))

Basically—Apple must sell more iPods at the new price plus the additional margin of the new iPod price to MORE THAN MAKE UP FOR the lost profit from both iPhone hardware sales and AT&T contracts.

Markets usually are efficient, so why shouldn’t Apple release many products and let people choose? A) iPhones, as a new device, have huge profit margins that people may not be willing to accept for music players with much stronger competitors that are no longer so much less hip and B) the AT&T contracts are like extra money.

So, lets look at some numbers:

iPhone sales: 800,000 sales this quarter. 10 million target by end of 2008.
http://ca.today.reuters.com/news/ne...1_N21387623_RTRIDST_0_TECH-IPHONE-UBS-COL.XML
iPhone profit: $335 for 8g model (for parts and labor, other costs similar to ipod)
http://www.computerworld.com/action...leBasic&articleId=9026178&intsrc=news_ts_head
AT&T contract for Apple: Estimates range from $3 (for old AT&T customers) per month to $11 (for new customers). Total of $72 to $264 for 24 month contract (Yikes, that’s just pure profit).

Total estimated iPhone profit: $268 million this quarter for phone plus $57.6-$211.2 for contract gained over life of deal (assuming most are 8g models (95% of first weekend models were) and costs vs price stays relatively stable. Remember, it’s a rough estimate). If Apple were to meet its 10 million mark (we’ll see), than that rises to $3.35 billion in hardware and $720 million to $2.64 billion in contract profits (THAT’S why they went exclusive). By comparison, General electric makes roughly $3-6 billion TOTAL per quarter, and Wal-Mart $3 billion per quarter. The iPhone profit is a perfect example of the power of a monopoly (in this case, on the only popular and well functioning cell phone/mp3 & video player). iPods have less of an advantage because there are many similar devices that can bring the price down (even if no one has a touch-ipod, if a $200 60 gb video player is on the market, it makes it harder to sell a $500 touch ipod with widescreen just for the added advantages).

The ipod is harder to handicap, mostly because no one has seen it. One estimate of the release of the 5g ipod puts its cost at $151 and price as $299 (http://www.ahorre.com/business/real_estate/business_news/ipod_profit_margins_50_percent/) , and while the price is $50 less, the parts have certainly gone down as well. For a touch ipod, one could remove the cost of cell-phone compatibility from the iPhone ($20-$40 has been mentioned on this board), but might need to add back in a large hard drive if it costs more than the iPhone’s flash memory. So a ipod touch with WI-FI could cost between $200 (iPhone minus cell) to $250 or even more with hard-drive costs. IF Apple kept its ipod profit margin at 50%, then we could see a $400-$500 hard drive, but there are a few reasons that might suggest against this. 1) iPods have many closer competitors, even if the iPod touch would be unique. 2) Lower prices and margins for lower capacity devices 3) Back in 2005, the ipod had far fewer competitors 4) People may just not be willing to pay upwards of $500 for a portable music player like when the ipod was released. A range of $300-$450 could encompass the new ipods while giving Apple a decent profit in an already saturated market.

Comparing the two, and without the price or cost of the new iPod touch, what we can do is look at HOW many iPods Apple could have to sell at what profitability to make up for lost iphone sales (remember, other factors such as cost of distribution and margin to outside sellers are roughly similar or small as to not disrupt the full picture, but can be added after constructing the model, that’s what economics is).:

iPhone profit per model: $400-$600.

iPod profit per model: $100-$250 ($200 cost plus $250 profit or $250 and $250 for 50/50)


Example: If WI-FI adds $75 (assume charging $100 over similar device without (even if they don’t make it) minus $25 component cost) profit AND many more sales (this is hard to predict) could, as one example, have 1 million more sales at $200 profit and 2 million sales with an additional $75 profit which would mean $350 in additional profit. If half of those 1 million sales came from CANNIBILIZING the iPhone, that would still only mean $250 in lost iPhone profit, and a NET gain of $100 million dollars, plus a new market niche.

What the above example shows, however, is that it could go either way, depending on cost, price, and total sales of the new iPod. Apple has experts probably working on those very models, and of course they know how much it costs them (and then will set the price). While iPhones make a ton of profit, iPods make a good amount too, sell more, and will not cannibalize iPhones at a 1 to 1 ratio. Apple can probably predict sales at different prices and components pretty well, and adjust what they build and sell to make selling profitable regardless (WI-FI would have a leg up, because they would be able to sell more).

Assuming the technology is no problem, then what may really shape this debate over WI-FI isn’t the profits shown above, but the strategy (https://forums.macrumors.com/showthread.php?p=4114327#post4114327) that they may consider for the long-run and how an advanced iPod (aPod?) would fit in.

Well, that was fun, and while I could have (perhaps) just waited until Wednesday, it sure helped me get a better handle on the iPod/iPhone market (and no, it didn’t take hours to write this, I just type fast). Congratulations and thanks to anyone who has read all of the way to the bottom of this, and I apologize for the many mistakes that I am sure that I have made above, and I really hope that I haven't made any big enough to make the entire analysis invalid.

P.S. think of how many socks are sold each year. iSocks could TAP into a huge market, and would only cannibalize the iSandal, leaving the iPhone alone. What a perfect alternative.
 
You put out quality products with quality features, people will buy everything you got. You put out half-assed products with missing features and you piss off your customers. The whole "cannibalize" argument is completely specious. Does Apple screw up it's notebooks so they won't cannibalize iMacs? They both do the same thing. iTunes movies cannibalize iTunes music sales and vice versa. People only have so much money and will make choices. Better to give them high quality choices so they look to you and not elsewhere and whatever way they choose you get the sale.
 
You put out quality products with quality features, people will buy everything you got. You put out half-assed products with missing features and you piss off your customers. The whole "cannibalize" argument is completely specious. Does Apple screw up it's notebooks so they won't cannibalize iMacs? They both do the same thing. iTunes movies cannibalize iTunes music sales and vice versa. People only have so much money and will make choices. Better to give them high quality choices so they look to you and not elsewhere and whatever way they choose you get the sale.

Aww man, Black Belt.. you're gonna make everyone realize that the iPod will have Wi-Fi, before they're released.. and then when they come out, I won't be able to laugh at everybody. ;)
 
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