A Mini Disappointment | January 6, 2004

iPod miniI was quite excited about today's Apple keynote speech. There have been lots of rumours flying around about new Apple hardware. Amongst them have been speculation about a new iMac design, the possibility of a G5 powerbook and a tivoesque digital hub called an iBox. There has also been talk of an iPod like device that can playback video and the ever present speculation about tablets and PDA's.

Sadly none of the above appeared at this Macworld, although we were promised that 2004 would herald some great new products. What was announced was the iPod mini. On the face of it, this is a really good idea. iPods were *the* cool present this Christmas and have dominated the top end mp3 player market. However they are pretty expensive so it makes sense for apple to create an affordable version to increase their market share even more. This they are trying to do with the iPod mini.

However from what I can see the pricing just doesn't stand up. While the iPod mini looks pretty cool (although personally I think the candy colours look tacky) it's only $50 less than the 15GB iPod, yet has about a 10th of the capacity. If the difference was $100 I could see people being tempted, but for $50 difference I'd guess most people would go for the 15GB iPod instead. As such I'm guessing that apple will probably have to drop the price of their iPod mini's pretty soon after they come out in order to make them competitive. So if you want one, it would probably be worth while waiting around for a few months to see what Apple do.

Posted at January 6, 2004 9:57 PM

Comments

Clint Ecker said on January 6, 2004 10:32 PM

I wrote a bit about Apple’s move on their iPod line from a psychological decision making standpoint (I am not a psychologist, I just play one on the Internet) but I think it kinda holds up.

But think about it. What do you think people said when Apple introduced iMacs? Colored, overpriced, underpowered computers? Who’d buy those :D

http://phaedo.cx/archives/2004/01/06/macworld_sanfrancisco_aftermath.html

erat said on January 7, 2004 3:31 AM

Actually, the iPod Mini is targetted for a market that differs from that of the “normal” iPod line. The new Minis have flash drives and hence are suitable for use during workouts or other highly active situations. Normal iPods (I own a 5-gigger that simply rocks my world) have moving hard drives in them and can be mortally damaged if jostled around too much.

For the money, the Minis are actually priced competitively for their market. However, if I were in the market for another iPod I’d gladly hand over another $50/US and get the extra 11GB of storage. I’ll just find an extra long headphone cord for the gym. :)

Aaron said on January 7, 2004 4:39 AM

Erat:

That’s what baffles me most: though Steve Jobs said the iPod mini was supposed to compete with flash memory-based players, it still just uses a hard drive. Scroll down to the bottom of the specs page:

http://www.apple.com/ipod/specs.html

Platypus said on January 7, 2004 7:39 AM

Andy,

Quick correction: the iPod 15GB is about 4x bigger than the iPod mini, not 10x as you stated. I also made that mistake because the 40GB iPod claims to hold 10,000 songs while the 4GB mini holds 1,000.

This is what Apple is competing with (Rio Nitrus 4GB, $250): http://biz.yahoo.com/prnews/040106/sftu015_1.html . But, I think Apple’s target price for iPod mini is $200 by spring (they would sell like crazy with the Pepsi promotion) and maybe $150 by christmas. When people don’t want to pay $299 for a music-playing thing, they won’t pay $250, either. But, it’s a smart move to get iPod mini out, either way.

Robert Castelo said on January 7, 2004 11:59 AM

Now that it’s capacity is enough to hold almost anyone’s music collection, Apple will have to stop increasing the size of the hard drive, and compete on price and new features…

I’m looking forward to seeing what new tricks Apple can build into the iPod - voice memos is the one I’m really waiting for.

bongoman said on January 7, 2004 12:22 PM

Why do people keep thinking the mini iPod is flash-based memory not a hard-drive?

There is nothing mentioned at apple.com to suggest it is not hard-drive based.

Funkatron said on January 7, 2004 12:34 PM

I think its using those super-cheap cormack mini HD’s the players it’s size uses(Rio Nitrus, iRiver iGP-100, etc)

Andy Budd said on January 7, 2004 2:46 PM

I’m guessing people keep thinking the iPod mini uses Flash memory because in the keynote speech they said that this product was aimed at the high end flash mp3 player market.

I admit that I got my sums wrong and the 15GB iPod only has 4 times the capacity of the new iPod mini, and not 10 as I’d previously stated. However I still think they are overpriced and can’t see that many people choosing them over the 15GB version just to save $50. The only thing the iPod mini has going for it as far as I can see is it’s reduced size, and to be honest I’ve never met somebody who wanted to buy an iPod but didn’t because they thought they were too big.

maura said on January 7, 2004 2:49 PM

if it was 199$ it would be a lot more viable. at that price there’s pretty much no reason to not upgrade to the 15GB. it also would have made his presentation a lot stronger, when he was comparing them side to side. he could have said, price difference, 0$!

Ryan Thrash said on January 8, 2004 3:14 PM

The iPod mini is another Cube. Awesome design and technology, priced horribly wrong.

A $199 price would be compelling, even it it were only 2GB in size. At $249 you might as well get not only a music player, but also the ability to boot off your iPod and actually have enough space left to store/move your projects and main apps around.

Gregg Griffin said on January 9, 2004 3:25 PM

Unfortunately this is just another example of Apple being great product innovators and horrible business innovators. This article says it better than I ever could.

http://www.fastcompany.com/magazine/78/jobs.html

In some ways, their die-hards supporting them in such kool-aid drinking fashion over the years is more disturbing than the mass flock of microSHEEP who just don’t know any better.

If dwindling pc market share and being bailed out by a digital music player does not wake them…maybe it is time for a core user revolt?

Not likely, so continue to gulp down the kool-aid until the company runs its self into the ground!

Gregg

Josh said on January 9, 2004 8:24 PM

Robert Castelo said that he’s been waiting for voice memos in the iPod line. Well, Robert, that’s been out and available for months, so wait no longer!

http://catalog.belkin.com/IWCatProductPage.process?Merchant_Id=&Section_Id=201526&pcount=&Product_Id=158384
http://griffintechnology.com/products/italk/index.html

Gregg, Apple will never run itself into the ground with the number of supporters and purchasers they now have. They’re making a ton of cash, and have over four billion in the bank. You’d be waiting until your grandchildren had children for them to die off.

Gregg said on January 9, 2004 9:29 PM

It is not that I don’t like apple. I have used macs for years for design and video work. I just think that the average “Mac Snob” needs to get their head out of the clouds and see what is really going on.

“making a ton of cash?”

quote from fastcompany article
For its fiscal year ending September 27, 2003, Apple reported just $6.2 billion in revenues, three-quarters of it from the sale of personal computers. The father of the PC—and, remember, the industry’s number-one vendor in 1980—has since sunk to a lowly ninth, behind competitors Dell, Hewlett-Packard, and IBM, just for starters. Sadly, Apple is also behind such no-namers as Acer (seventh) and Legend (eighth). So much for innovation and creativity. …

Where Apple was once one of the most profitable companies in the category, its operating profit margins have declined precipitously from 20% in 1981 to a meager 0.4% today, just one-tenth the industry average of 2%. And it isn’t just the hardware manufacturers that are devouring Apple. Its chief competitor in software, Microsoft, earned $2.6 billion in its most recent fiscal quarter (ending September 30). That’s nearly 15 times the $177 million in software sold by Apple in its most recent fiscal quarter and roughly equal to the profits that Apple has earned from all of its businesses over the past 14 years. In just three months.
end quote

I agree with you that Apple is not going anywhere quickly. The reason for that is not Apple though.
read this: http://www.wired.com/news/mac/0,2125,61801,00.html
The real reason they are not dead is because of the Mac users mortal enemy. MS likes the $$ and need the competition to keep the DOJ off their backs.

Tony said on January 10, 2004 12:12 AM

Actually, it says right on Apple’s website (under Tech Specs for the iPod’s) that it’s a hard drive…Under capacity it reads:

“4GB, 15GB, 20GB or 40GB hard disk drive”

The only 4GB iPod is the new mini.

Bob said on January 10, 2004 10:34 AM

Gregg,

You can’t compare the business models of Microsoft, Acer and Legend to Apple. The article you quoted is not news. These companies work in different ways. Yes, if Apple was trying to compete in the commodities market they would be in trouble now. That’s not what they do though is it. They sell to a different market and they make a profit.

Apple is one of the few tech companies to make it through the tech implosion of the last few years in the black. They have a huge user base and great products. Those users don’t care if Dell can sell them a box for dirt cheap when it doesn’t do what they want.

If you’d like some real, well thought out analysis of the Mac market you might try a free subscription to MacJournals. These guys don’t pull punches and they don’t report garbage like FastCompany and call it news.

Check it out at http://macjournals.com/

Mike said on January 10, 2004 11:57 AM

The value behind the mini iPod is it’s size…and the capacity you get with that size. Alot of people don’t want to lug around something as big as the regular one for various reasons.

The thing is about the size of a standard business card and only 1/2 inch thick. Very easy to put in a pocket or hide it, or worst case scenerio loose it.

Not saying that I don’t think $200 would be a better price in today’s economy, but they have their reasons for picking the price they have.

Gregg said on January 10, 2004 7:17 PM

Bob,

Are the articles #’s unfactual? If so I apologize. Maybe you should read it again though because they are making the same point that you do in your post. Apple and Dell/whoever are not the same.

“Apple is one of the few tech companies to make it through the tech implosion of the last few years in the black”

As one of those elite few you would think that their market share would increase significantly.

The reason that we are even discussing this is the iPod. Another great example of Apple being innovative with a great product like no one else. The problem happens when actual competition enters the arena with a similar product that maybe does not look as cool but has the same features and maybe a way to replace the batteries. Then Apple has a chance to leapfrog - drop the prices on the iPod its self and then create a smaller “budget friendly” line that keeps you a step ahead. But alas, it is not to be. Maybe later this year after they get many, many people to pay the inflated price they will lower them….but wait, that sound a little like capitalisim and corporate usery of the masses. Aww nevermind, Apple would never do that.

shareen mitchell said on January 9, 2006 6:43 PM

i think its unfair that apple only allows windows 2000 or xp i myself having windows 98 cant get my ipod to go as an exclamation mark keeps showing every time i try to get it to work which i am not happy with at all is there anyone who can give me any advice on how to get it working.