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Cutting Off the Oxygen of iPod Rivals


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February 07, 2006

Cutting Off the Oxygen of iPod Rivals

Peter Burrows

Apple announced a 1-gig iPod nano today, for just $149, as well as price cuts that bring the price of the iPod shuffle's to just $69 and $99. Now, that's pricing "for the rest of us."

Now, I tend to agree with the folks at Engadget that this nano could be a huge seller. I think most people who really care about capacity--that want to carry all or most of their music with them at all times--aren't going to be happy with any of the nanos as their one and only iPod. But on the other hand, there's a huge audience for people who aren't such gigabyte hogs. And I think a huge swatch of those folks will gravitate to this $150 model.

And what about the more-affordable-than-ever shuffle? I doubt it's going to be generating many headlines for its vast sales--mostly because that doesn't seem to be Apple's intention. The poor old shuffle hardly gets any attention from Apple's marketing mavens.

But that doesn't mean today's price cuts on the shuffle aren't big news. Indeed, they are very big news indeed, if you're in the unenviable position of having to compete with Apple in MP3 players. Think back just a few years, when Apple was the new kid on the block with the laughably high prices (remember "Idiots Priced Our Devices"?). Not anymore. Now, it's using its huge volumes and distribution might like any good old-fashioned (near) monopolist: to put an economic squeeze on competitors that dare compete with it.

Just consider poor Dell? Just yesterday, it was reported that it has quietly killed its line of DJ hard-drive-equipped players. Instead, Dell will focus only on selling its flash-based Dell Ditty, which offers 512 MB for $99. That compares to a 512-MB iPod shuffle for just $69. Uh-oh.

09:45 AM

iPod and iTunes

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There is another factor to consider. With an iPod, Nano, or Shuffle you get to use iTunes to manage the music. I haven't seen anything comparable to it for non-Apple players.

Posted by: Al Swearengen at February 7, 2006 11:46 AM

Surprise, Dell kills another service/producxt line other than PC's (how many is that? 10?) Dell is a one trick pony that should be worried when a faster pony with less employees and less overhead shows up.

Buh bye Dell Ditty (nice name - after naming most of their products GHFMS-56237617634, they finally break down and use an actual English word and 'Ditty' is the best they could come up with?)

Posted by: jbelkin at February 7, 2006 12:27 PM

Good one jbelkin

Posted by: ronald at February 7, 2006 01:11 PM

Actually, the Dell Ditty is still alive and well. It was their 20GB hard-drive based one that they dropped.

Of course, we all know the Ditty isn't far behind.

In Dell's defense, though, they get out as soon as they see it isn't going to work. Anybody remember their all-in-one iMac-like PCs? Those lasted about six months...

Posted by: Peter at February 7, 2006 02:36 PM

I doubt they'll kill the Ditty. They use it as a sweetener for PC promotions. And, if anyone is foolish enough to pay full price, so much the better.

Posted by: KenC at February 7, 2006 06:20 PM

Some players are able to compete - and that are those who find their own niche, like tiny company Asono - who sold around 100.000 units and made money in the process. Their trademark is avant garde designed mp3-players - priced well above Apple.

To compete with the market leader on price-only is fools play.

Posted by: Julius at February 9, 2006 06:40 AM

with regard to the now-defunct dell mp3-player: they pulled the plug on that one over one month ago. as 'the register' observed, it took us over one month to realize this. not a testament to that player's popularity...

-ch

Posted by: ch at February 9, 2006 08:21 AM

What differentiates an "Apple" monopoly from a "Microsoft" monopoly?

an Apple monopoly keeps giving people what they want, while a Microsoft/Dell/Whatever-Stupid-Windows-Based monopoly keeps making toxic landfill material...

Who cares what DELL cannot do, if theire business model is moot in two years anyway?

Posted by: Anthony Harmon at February 9, 2006 01:02 PM

To add - Sony killed the BEAN the other day. For those lamenting the Apple " monopoly," keep it mind it's a monopoly built upon a better product(s). The Bean? It had a monochrome screen and introduced with great fanfare in spring ... to ship in the ummer. In September, Apple introduced a little something called a Nano - that was about as 1/3 as thick, color screen, and color photos. By the time the Bean actually shipped, it was already dead in the water ... not to mention that it cost more than an ipod with the same amount of storage ...

Posted by: jbelkin at February 15, 2006 05:02 PM


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