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iPod Mini: Smaller Rightfully Costs More

07 Jan 2004 by Jason Fried

I’m hearing a lot of people complain about the price of the new iPod mini. People are breaking it down by price per megabyte/gigabyte and then comparing it to the other iPods (and not to the non-Apple competition). I think that’s missing the point. The competition isn’t other iPods, it’s other products. Apple loves that you are debating between their two products.

Further, when it comes to technology, smaller is almost always more expensive. Miniturization requires more R&D and greater engineering precision. Apple has basically managed to re-issue the original 5GB iPod, but shrink it down considerably (in all dimensions), keep the battery life around 8 hours (I know the original was 10, but 8 is plenty close for a much smaller unit), house it in a new durable aluminum case, provide color options, make it Firewire and USB 2 friendly (including charging via USB), make the same unit Mac and PC friendly, and price it lower than the original 5GB iPod. To me that’s quite an achievement. And, when you look at the other competitors in the market, you’ll see that it’s priced right on target. Should it have been $199? $149? Who knows if it even could have been (it’s easy for us to say, but we don’t know the whole story). Apple did the right thing — they’ll get the early adopters to pay as much as possible and then they can reduce the price in about 6 months once they’ve been able to measure the success (or failure). Of course, we’ll all have to wait and see how the market takes it.

92 comments so far (Post a Comment)

07 Jan 2004 | dayvin said...

JF, well said. I think you and Gruber are the only two people who've identified small size, not price, as the main point.

If people really want to complain about price, how about the scads of poorly-designed 256MB units out there for +/- $200?

07 Jan 2004 | Sarah said...

This is the only case *ever* where I will say that smaller is better. Plus, you can have it engraved!

07 Jan 2004 | Matthew Oliphant said...

Great for making things smaller, because there are so many people out there who want to save .5 inches in height, .4 inches in width, and .12 inches in depth, and have a third of an inch less screen size.

And have 11 gigabytes less storage space.

With a cost savings of 50$.

I, and hopefully most other fools, will gladly fork over an extra 50$ to schlep around 2 more ounces and over 3 times the storage space.

Lord knows I don't want to carry around 2 extra ounces when I jog... that might cause me to burn more calories because I am carrying more weight.

Look out Cube, iPod Mini is a comin'.

07 Jan 2004 | Erin said...

Apple has set up a win-win situation for itself.

The primary argument coming from the tech-saavy is for an added $50, you can get an extra 11 MB in the iPod. Those who can afford the $50 will surely spend it for the added capacity. Apple wins because they will likely steer that group to make the bigger purchase.

You could almost compare the iPod/iPod mini situation to shopping at a wholesale club -- why pay $3 for 10 pickles at a regular market when you can spend $5 for 30 pickles at a wholesale club? Sometimes you just don't need that many pickles.

By introducing the mini iPod, Apple targeted those new to digital music. Many users with small music collections probably were not prepared to slap down $300 on an MP3 player much bigger than their needs warranted.

There is also psychological something about seeing a company set the price of a product, then release a similar item with the price set below that line. For digital music newbies, $250 for 4GB may not seem steep.

07 Jan 2004 | miles said...

the people that buy this will probably be the same people who bought the new VW beetle and thought they were the cat's whiskers ;)

07 Jan 2004 | Greg Greene said...

Miles:
No, Erin has it right.

You might love music, I might love music, and we both might have scads of songs on our respective hard drives but I know plenty of people who only buy the occasional CD, and wouldn't know what to do with 15 GB on an iPod [maxi?] if they spent all day thinking it over. You probably know a few people like that, too.

Not that I don't think you're entitled to kvetch about the price; it's just that you need to recognize that you aren't in the target demographic. For newbies and casual music fans, a 4GB iPod might be the cat's pajamas techheads and music buffs, meanwhile, have other models to choose from. What's so odd about that?

07 Jan 2004 | Mike said...

At first I was pretty torn about what to think about the new iPods.

After thinking it over, I don't think that Apple separated the iPod lines enough. If they could have utilized Cornice's new 'storage device' into the iPod Mini, I think that would have made people a lot happier.

We can all argue price until we're blue in the face, however, if Apple dropped the iPod Mini's price down too low, it would destroy regular iPod sales. Absolutely destroy them. Why spend $299 when you could drop $99-$149 or so (pre-MWSF fantasy price) on an iPod that better fits your lifestyle? I'm going to throw out a guess and say that more people have between 2 and 4GB of music on their computer than people who have 20GB+. We're not talking college age RIAA pirates either (who, me?), but regular people.

But who am I kiddingIf I had $250 kickin' around, I'd throw it Apple's way for an iPod Mini in an instant.

07 Jan 2004 | ek said...

It's always funny to hear people try to break things like this down using logic. Since when is purchase behaviour driven by logic?

People from all walks of life, newbies to "experts," music lovers to occassional listeners, technophiles to technophobes, will buy the iPod Mini because it's tiny and cool as hell. Price is third, or perhaps even fourth on the list of priorities in a purchase like this. Capacity is probably even lower down on the list (I'm willing to bet that half of all current iPod owners don't know the drive size of their iPods).

It seems like a lot of people have already forgotten how many complained about the price of the original iPod, and predicted its doomed based on that one point (I was among them). Well, it's done pretty darn well, and this latest addition to the iPod family is setup perfectly to run with the momentum created by its predecessor.

07 Jan 2004 | Chris from Scottsdale said...

"People buy with emotion and decide with logic."

07 Jan 2004 | MegaGrunt said...

With the new music making application GarageBand, Apple now seems to be positioned at every step in the music process.

Make the Music (GarageBand)
Distribute the Music (iTunes Music Store)
Play the Music (iPod)

How soon before GarageBand integrates with the iTunes Music Store so users can self publish their latest creation and completely bypass the music labels?

Now that there are so many iPod/iTunes users, Apple could soon be creating it's own indi music scene.

07 Jan 2004 | Brad Hurley said...

Well, I suppose the iPodlet is undeniably cool and tiny, but the original iPod is still cool and tiny, too. I think a lot of people will look at the two and say, "hey, for only $50 more I can get something with almost four times as much storage space, and it's only slightly bigger." Albeit, it only comes in white.

I'm betting the iPod mini will do very well, because most things that I wouldn't want to buy tend to turn out to be extraordinarily popular.

07 Jan 2004 | Don Schenck said...

You want color for your iPod? You got it!

It's cute. I like it.

07 Jan 2004 | dayvin said...

Just a quick note on size the iPod mini is 41% smaller than its big brother. Total volume is 3.6 cubic inches vs. 6.1 cubic inches. That's why you're paying more for "less."

07 Jan 2004 | Brad Hurley said...

True, but if the "big" iPod weren't already small enough to fit in your pocket, the mini's smaller size would be a stronger selling point. Total volume isn't really important to a consumer; the dimensions are what matter. The original iPod already is small enough to fit in your pocket. The mini just fits in your pocket with a bit more room to spare.

07 Jan 2004 | Iolaire McFadden said...

I'm glad that people are recognizing that the key is the size. I think the comments that everyone is saying like "for $50 more you get..." are those who identified with the iPod as a hard drive.

Every day users are not moving around files that are larger than 2 gigs but smaller than 40 gigs. But, the people who are buying the older iPod's or have so already. When I need to move data I use FTP - just got done moving a 20 meg scan to my home computer - do many people move files larger than that?

I've bought a firewire hard drive that was much larger and much cheaper than the iPod, thus I don't have a need for a portable hard drive. So if I buy a MP3 player it will probably be a small iPod, probably when the prices drop in to that magic $100-$200 range for either a smaller or a refurbished unit.
iolaire

07 Jan 2004 | brianp said...

another point that no one has mentioned, is the arm-strap. my mom saw that and said "i can get an ipod and take it to the gym?" she's been too afraid to get a big one because there's no strap and she thinks she'll drop it. 4gb is plenty, and the size is a big deal. i actually think she ( and probably many others ) would pay *more* for the mini than the 15gig. i paid more for my powerbook than i would have for a entry-level G5 that is faster...

07 Jan 2004 | Darrel said...

People always whine about price. Apple has never worried about undercutting on price. They're still in business.

As for those that say 'well, for $50 extra, I can get the bigger iPod', well, that sounds like genious marketing to Apple. They can now draw you in at a lower price point, buy you'll fork over an extra $50 to them.

I have one of the old 10-giggers. I actually don't use it much anymore now that I have a laptop. If when I did use it, I rarely listened to all 10 gigs of music. Usually I just cycled through a few albums. If I were buying today, I'd go for the smaller one. I think too many people are hooked on the whole 'bigger portions' syndrome in this country. I COULD get the steak, but for an extra 2 dollars, I can add a side of pork!? Well, hell...give it to me!

07 Jan 2004 | Don Schenck said...

How do you listen to it? Do you where headphones?

Well, why doesn't someone just build the MP3 player into the headset? Then you'll be hands free and no worries at the gym, kayaking, etc.

(Although anyone who listens to music while kayaking or bikine ... well ... you're crazy)

07 Jan 2004 | Don Schenck said...

b-i-k-i-n-g

(cold fingers)

07 Jan 2004 | Ed said...

ehhhh... Yes, people will look at the $250/4GB mini and say "For $50 more I can get a bigger one - so I should get that one." But the point is, if they were going to spend $300 on an iPod they already would have done it - there's been plenty of time. And these same people aren't going to now spend $250 for less storage.

Ah! and I laugh at the people who say that most people only need 4GB for their music. I bought the 20GB about 3 months ago and after ripping almost all of my CDs I'm down to 4GB left - and I have never even purchased a song from the iTunes store. I'm already saying I wish I had bought the 30GB. I would argue the average high school/college kid has over 10GB of music on their computer and countless other CDs copied from friends - all legalities aside, it's the truth. The minis 4GB is a [expensive] drop in the bucket.
"640K [of memory] ought to be enough for anybody." - Bill Gates

07 Jan 2004 | Benjy said...

I'm kind of middle of the road in regards to the new iPod mini. I do think that there's a market for something between the 256MB flash memory MP3 players and the 10GB+ hard drive based ones like the iPod. There are plenty of people who want to have access to 40-50 albums worth of music rather than 40-50 songs, but who don't have large music collections or don't see the need to carry their entire collection with them at all times. And I like the idea of creating more affordable products which introduce people to the brand.

But I tend to agree with those who say, "well, for $50 I can get a big iPod with 4 times the storage capacity." I have a 15GB iPod, and it's incredibly tiny in my mind. Much smaller than any walkman, discman, etc. I've used at the gym in the past. The case with belt clip that comes with the iPod has been fine for use at the gym, and there are tons of other cases on the market. So I don't reall think that there are uses for the iPod mini that aren't appropriate for the iPod.

That would leave price as the main difference, so in that case, I think that $50 is too small. I'd have maybe priced it at $199, so the $50 difference is between the small flash MP3 players and the iPod mini. Then people would say, "Wow, for only $50 more I can get 16 times the storage!"

How soon before GarageBand integrates with the iTunes Music Store so users can self publish their latest creation and completely bypass the music labels?

This is an idea I've had for a couple years, but didn't have the resources to pull it off. I've seen the internet as the obvious venue for indie musicians to self distribute, allowing them a greater share of the fruits of their labor. I really hope Apple's able to do just this and help musicians bring their music directly to their fans.

07 Jan 2004 | Don Schenck said...

w-e-a-r


ARGH!

07 Jan 2004 | Don Schenck said...

Here ya go!

07 Jan 2004 | frank said...

i think exactly the same, i post it in my blog, but it is in spanish. u can read it here in babelfish

http://babelfish.altavista.com/babelfish/urltrurl?lp=es_en&url=http%3A%2F%2Fplanetfrank.mibitacora.com%2Findex.php%3Fitemid%3D79


i also made a comparision with new 4gb nomad and 4gb rio
about prices, sizes and functions.
hope u like it

pd: u r now in my feeds

07 Jan 2004 | Ed said...

brianp - Why don't you tell your mom to get the Nike Sport 128 MB MP3 Player for the gym? It's only $150. That's $100 less AND it comes with the armband. The iPod mini's strap is an extra $29.99... Joking aside - I never thought an arm band would be the deciding factor in getting an MP3 player and the new mini doesn't look very "sporty" to me.

This is just getting funny now.

07 Jan 2004 | Don Schenck said...

I'm going to create MP3 files of gym sounds, so people can listen to gym sounds while working out at the gym. You know ... weights clanking, people chatting, guys grunting.

Like the time my son programmed the memory keys on his phone. Memory-1 was "1", Memory-2 was "2" ... and so on. So when he wanted to call someone, he pressed twice as many keys!

07 Jan 2004 | Tim said...

What I want is an iPod MEGA. I'd vote for it to cost $50 more than the normal (passe) iPod.

Hell, if i'm going to spend $350 for a luxury item, i want everyone in the world to see it and know that I own a $350 luxury item. I want my iPod MEGA to come with an optional "waist belt" so I can sling the thing onto my back...or maybe an Apple-branded L'il Tykes car I can pull my MEGA around in, bassing out in front of Starbucks.

I don't want no dimure (sp?) little iPod that only *I* know about.

07 Jan 2004 | Benjy said...

Hell, if i'm going to spend $350 for a luxury item, i want everyone in the world to see it and know that I own a $350 luxury item... I don't want no dimure (sp?) little iPod that only *I* know about.

Isn't that what the white headphones are for?

07 Jan 2004 | monkeyinabox said...

From all the SPAM email I get, when has smaller been better? :)

I guess if you want to show it off, put in on a big gold chain and wear it around your neck as technology-bling.

07 Jan 2004 | Andy said...

I would like to start by saying I love this blog and I really enjoy the opinions expressed nicely in response to ideas presented here. I would take slight issue with one point that is made and that I have seen quite often in the crazy and loud day that has followed the iPod mini announcement yesterday.

"The competition isnt other iPods, its other products." I think the worry that people are pointing out is that Apple doesnt get to choose who they are competing against. This product DOES compete against the current line of iPods whether it is their intention or desire to do so. The only concern in this is whether they will actually expand the user base as was expressed or whether it might split and slightly cannibalize the existing user base.

Only time will tell whether this furor is "this will never sell" like the iMac or "this will never sell" like the Cube. But in the mean time Apple needs to sell the positive aspects of the device like size, design(though in truth I find these devices much less elegant that the originals), interface, and iTunes and not the somewhat less important,if not slightly dated, comparison yesterday.

Peace,

Andy

07 Jan 2004 | pb said...

At a minimum, the $250 price announcement was underwhelming. This could have been mostly because of the rumors of the (outrageously unrealistic) rumors of a $100 device. But it's also because the 15GB model is just $50 more. I think comparisons to the 15GB *are* appropriate to pricing analysis. Also note that many competing 15GB models are also $250. But note that the 15GB iPod doesn't include a dock, case or remote.

One sales strategy could have been bringing out a 2GB device at $150-200 knowing that half the buyers would eventually upgrade as they figured out that they really want more space.

I think it's reasonable to conclude that a 20% price decrease for what sounds like 80% less of a device is underwhleming.

07 Jan 2004 | Schiano said...

Get an educational discount, and the iPod mini is 229 ;)

07 Jan 2004 | ek said...

Ed, that Nike MP3 player absolutely sucks. I had one and hated it. The static memory-based players all, in general, suck. Unless you don't mind listening to the same two CDs worth of music, you'll be shuffling data on and off of it constantly, and since the software that comes with the devices (and pretty much all other software that can manage such devices) sucks, it's not a pleasant experience.

As for the "it should be bigger so others can see it" point, by that way of thinking the most expensive cell phones should be the size of Army walkie-talkies, but they're not.

All these "logic" arguments are pretty much moot. When the iPod minis are in stores go ahead and take a look and see if you think it's worth it as compared to the other devices on the market these days. I'm willing to bet that plenty of people will think it is.

07 Jan 2004 | Brad Hurley said...

What I want is an iPod MEGA.

This exists. It's called a PowerBook.

07 Jan 2004 | Will said...

Just a question, did you ever hear anyone complain about their big fat iPod? Smaller wasn't what the market wanted, it was cheaper that they were looking for.

07 Jan 2004 | SU said...

Will said...

Just a question, did you ever hear anyone complain about their big fat iPod? Smaller wasn't what the market wanted, it was cheaper that they were looking for.

Considering Apple already nailed "small" to a degree with the original iPod and "cheaper" with price reductions over the last several years while upping storage space on that same iPod, where else could Apple go?

I agree with EK here -- I waited and waited on the iPod because I didn't feel it was compelling (from a logical standpoint) at the pricepoint and capacity it was selling for at the time... Then I walked into an Apple Store and played around with one -- I was hooked. Other people may have the same reaction when they see the iPod Mini in person.

07 Jan 2004 | ek said...

SU's comment also goes to show the wisdom of Apple opening up their own stores (another move I had doubts about -- good thing I don't run Apple, eh ;-).

It'll be really interesting to see what happens with Garage Band. I think it'll either go nowhere or be huge.

07 Jan 2004 | Brad Hurley said...

I think Garage Band will be a hit. The demo yesterday blew me away and I can't wait to get it.

Back to iPods: the only reason I haven't bought one yet is that I've been waiting to see if Apple will make one that can record good-quality live sound direct to MP3 or AAC, using an external mic. Right now it only lets you do mono voice recordings. I'm dangerously tempted by the iRiver 20 GB unit which seems perfect except that, well, it's not an iPod. And I use iTunes to store all my music so an iPod makes more sense anyway. Guess I'll just wait another year and see what Apple has up its sleeve.

07 Jan 2004 | Tim said...

As for the "it should be bigger so others can see it" point, by that way of thinking the most expensive cell phones should be the size of Army walkie-talkies, but they're not. - ek

I should say that I was completely, 100% joking in my "iPod MEGA" comments. I neither own an iPod nor am I that passionate about an iPod. I think the designs of both sizes of iPods are, in a word, swell.

That said, I think having an Army walkie-talkie cell-phone would be sweet. I'd love to lug that around with the over-the-shoulder vcr-sized battery while in the grocery store checkout line.

07 Jan 2004 | Darrel said...

I agree with EK here -- I waited and waited on the iPod because I didn't feel it was compelling (from a logical standpoint) at the pricepoint and capacity it was selling for at the time... Then I walked into an Apple Store and played around with one -- I was hooked.

That was my exact experience. I would have never bought an iPod, but then got one for a gift and then asked myself why I never bought one before. You can't compare an iPod to any other MP3 player on price. It's in a different league.

I've played with many other mp3 players since then, and most are infinitely more clunky than the iPod.

For everyone waiting for a super-cheap iPod, well, that's what all the competitors are for. They cost a bit less, and are a lot cheaper on style, workmanship, and usability.

07 Jan 2004 | Lance Osborne said...

Did anyone else notice the addition of an iPod to the Apple 1984 ad?

20 Years of Macintosh

;-)

08 Jan 2004 | Jin Kim said...

I'm in total agreement with Darrel that iPods are in totally different league when compared to other MP3 players.

As with Web sites, there's value added by iPod's design and construction that continue to separates it from the rest - even as others have tried to copy.

iPod mini does the same at "tier 2" or solid state MP3 players market that regular iPod have done at "tier 1" or harddrive based MP3 players before iPods came along.

Apple will undoubtly take iPod mini through the same evolution as the original iPod. I think it'll be soon (within a year) be clear that Apple has done it again.

08 Jan 2004 | pb said...

Here's a hypothetical: Apple launches the iPod mini instead with Cornice's 1.8 GB drive (saving at least $70) for $199. With 2 or 4 gigs, you've either got a small collection or you move tracks around. Apple undoubtedly sells more units and makes more on each unit. The 2 GB drive proves to small for a large portion of users who move up to the 15 gig.

Also, I'd like to dispute the rationale that smaller should be more expensive. All across the PowerBook line it's the complete opposite.

08 Jan 2004 | El Gruga said...

I'm betting the iPod mini will do very well, because most things that I wouldn't want to buy tend to turn out to be extraordinarily popular.

Sounds like a Bukowski quote....LOL! Thanks for making me laugh.

Oh the iPod? Well its all about emotion and music. I didnt want one, and then I bought one and suddenly I'm getting so much pleasure from listening to music while I drive.

The mini is beautiful - I will get one for sure, and let the kids and my wife use the 10 gig.

It will sell - pepsi promotion will make sure of that. "Mom, can I get an iPod, can I get an iTunes account, can I get an iBook?"

BTW, smaller is one thing, miniaturization is completely different - this thing is tiny. Got be expensive to make.

08 Jan 2004 | Ed Knittel said...

ek - I know the Nike one sucks... I've listened to it myself. I merely was suggesting it since it comes with a strap already which seems to be a factor in some people's decision in choosing an MP3 player ;)

It will sell - pepsi promotion will make sure of that. "Mom, can I get an iPod, can I get an iTunes account, can I get an iBook?"

I'd tell the kid to get a job! If someone pays $250 for their kid to get an iPod mini they deserve to have that kid drop it in the hallway at school and get smashed. I can't think of one person that would get this for their child except for maybe at the holidays - and, whoops, we missed that one.

On a side note: how many of these iPods and minis do you think people will lose? On Sunday the Chicago Tribune did a story that every day 3-20 cell phones are lost on the Metra train while over a dozen are lost in Yellow Cab's taxis (that doesn't include the other firms). That's got to be something like 45-65 cell phones each day. Keep an eye on your Pods, folks. They're next...

08 Jan 2004 | Lars Johansson said...

The new Ipod mini is the new Ipod. During 2004 it will gain storage and market share. The "orginal" Ipod will vanish, bloated as it is.

08 Jan 2004 | Bill Brown said...

How many iPods do you think people lose? I'd wager that it's pretty small. If you spend $300-500 for a music player, you keep track of it. I couldn't imagine a way in which I would lose mine. Get mine stolen? Yes, that I worry about whenever I use it (especially when I'm hiking alone in the desert).

08 Jan 2004 | Ping said...

The new Ipod mini is the new Ipod. During 2004 it will gain storage and market share. The "orginal" Ipod will vanish, bloated as it is.

Wow, that's the first I've heard this and it really does make sense. Seems like it's going to take longer than just a year, but I think you might be right. When I saw the new Clickpad (with the integrated buttons) I said "Holy shit, that makes a lot of sense and it's way better than the current setup."

08 Jan 2004 | pb said...

No it doesn't make any sense at all. Having your entire music collection on your iPod is a completely different concept from having a miniature that contains a subset of your collection.

08 Jan 2004 | pb said...

No it doesn't make any sense at all. Having your entire music collection on your iPod is a completely different concept from having a miniature that contains a subset of your collection.

08 Jan 2004 | pb said...

No, it doesn't make any sense at all. Having your entire music collection on your iPod is a completely different concept from having a miniature that contains a subset of your collection.

08 Jan 2004 | RS said...

For many of us, 10 or 20GB is still a small subset :)

08 Jan 2004 | Dan R. said...

I can think of at least 5 people I know who have not purchased a regular iPod simply because of its size.

As for the price, I have a feeling Apple knows what it's doing -- I would not be surprised if the $249 mark is the high end of what most consumers will pay, and Apple is smart enough to have done the research. I was in Publix yesterday, and overheard two stock boys discussing MP3 players, and how they are both saving up for an iPod mini.

Good job, Apple.

08 Jan 2004 | Ping said...

Related products and prices:

$200 256MB Creative Labs MuVo 256MB
$200 256MB Philips PSA 256MAX
$200 256MB Rio Chiba
$220 1.5GB Rio Nitrus
$250 1.5GB iRiver iGP-100
$350 4.0GB Creative Labs MuVo2
$269 512MB Creative Labs MuVo2 X-Trainer
$499 1.0GB Creative Labs MuVo2 X-Trainer

08 Jan 2004 | pete said...

On Sunday the Chicago Tribune did a story that every day 3-20 cell phones are lost on the Metra train while over a dozen are lost in Yellow Cab's taxis... Keep an eye on your Pods, folks. They're next...

Cool! Free iPods! All you have to do is take the train enough...

08 Jan 2004 | Matthew Oliphant said...

Now this story makes the price of the iPod Mini make more sense.

Partnering with HP will help convince those who don't understand that just because Apple makes iPod doesn't mean they can't use it on their PCs.

08 Jan 2004 | ek said...

Wow, that's huge news, thanks for the link Matthew.

Jobs seems to be keen on not repeating the mistakes of the past (i.e. not licensing the MacOS), but I'm kind of shocked to hear that Apple is going to essentially OEM a device for HP.

Will it be the HP Something-or-Other, designed by Apple? Will it even have any Apple branding on it?

This is really interesting.

You know who's really screwed this whole MP3 thing up the most is Sony. The iPod truly is the Walkman for this generation. And with the transition to flat panel displays, Sony is also losing big in the TV/display market.

And you can chalk it all up to internal politics and, though I hate this word, a lack of vision. Someone should write up a case study on this, something along the lines of "How to Lose Market Leadership in Three Easy Steps."

08 Jan 2004 | ek said...

This ZD Net story provides more details on the Apple-HP deal.

The gist of it is...


Apple will manufacture the player, which will not have the iPod name but will have the same design and features as Apple's third-generation iPod players, Phil Schiller, senior vice president at Apple, said in an interview. Also, the HP music player will come in "HP Blue," he said.

This is the full-sized iPod, not the iPod mini. What's nice is that it will work with all of Apple's iPod accessories. From the sound of it, the only bit of Apple branding the device will have is the Apple logo being displayed when the device starts up.

Schiller also stated that this is a "multiyear, exclusive" deal.

And for those who are interested, this photo gives you a good idea of just how small the new iPod mini is.

08 Jan 2004 | JF said...

Another small pic

08 Jan 2004 | Darrel said...

You know who's really screwed this whole MP3 thing up the most is Sony.

A couple of things to consider:

1) Sony, even more so than Apple, is very much about 'we invented this technology, so it must be better than everything else, and we will continue to market it until well after we've been proven wrong'. Granted, they're usually right, but better technology rarely means you'll sell more than cheap technology.

2) Sony is also a record label. That puts them in the odd position of selling hardware that pretty much encourages canibalization of their music label in its current form. (granted, being a movie studio hasn't stopped them from selling VCRs.)

09 Jan 2004 | One of several Steves said...

I was thinking the same thing, Darrel re: your point No. 1. Sony in many cases has succeeded in spite of themselves. Unless there are a ton of betamax VCRs and MiniDisc players running around out there that I'm not aware of.

At least all my non-Sony devices are using the MemoryStick for storage....

Funny that they keep doing that sort of thing, where really the only time they've been successful with something they developed was the CD - and that was along with Phillips. Sony makes money on the CE side by making common equipment better than most non-high-end manufacturers. I don't think they've ever succeeded with something proprietary.

09 Jan 2004 | ek said...

Trinitron was a patented (i.e. proprietary) technology, wasn't it?

Since it's not a "format," though, it's a case where being proprietary was actually better.

FYI, Sony's new 8-megapixel digicam accepts either memory stick or CF cards — a first for them. Maybe they're finally getting it?

09 Jan 2004 | markb said...

From Apple's perspective, it might be about the size, but from mine it really is all about the price. My wife hase been wanting an mp3 player for the gym for a while now, and I'd love to get her some Apple technology (we still have an old Mac at home that she uses occasionally, but she's long-since switched to Windows for 95% of her work). But $250 is simply more than we would ever spend on a little gadget -- that's 25% of a new refrigerator! For a christmas gift I'd consider $100 or maybe $150 if I really feel like splurging, and not buying any other gifts at all...

09 Jan 2004 | brianp said...

Ed, i get back from a hellacious 2-day shoot and now you're bagging on my mom? nice. alls i'm sayin, is that "mini" means a lot for some people.

09 Jan 2004 | GM said...

I know people want to compare this to flash players, but in reality, it's competing against Zen's and other HD based players at that price point. Hell, it's competing against the 15GB iPod.

Yes it's smaller, and yes the rumor mills did fudge expectations. But putting it so close to the base model iPod has me thinking Cube more than anything else.

09 Jan 2004 | Don Schenck said...

The iPod is still too big. It needs to be credit-card size, with Bluetooth to the headset or speakers.

Apple should get into the wireless phone business; with their designs, they'd kick ass.

Methinks.

09 Jan 2004 | jabbajaws said...

The same thing is being said over and over and over...

09 Jan 2004 | oliver said...

things are going to get a lot smaller soon - I'm waiting till they build something around this size hd...

09 Jan 2004 | ek said...

Great comment on Macintouch.com on this very subject:

Adam J. Bezark Just got back from Macworld. I was sitting in the Keynote, and felt the palpable silence when Jobs announced the iPod Mini's $249 price. The silence deepened as he showed us those drab photos of the mini. (I thought they were CG mockups, they looked so unattractive.) The audience left under a cloud of indifference.

Then I held one in my hand.

Down at the booth, Apple staffers had minis available for examination. I walked up to one who was wearing the mini on the armband clip. Without saying a word, he popped it out of the clip and plunked it into my hand. And I melted.

These things must have RDF-enhanced anodized finishes, because every bit of logic goes away the second you touch it. It feels much smaller, smoother and, dammit, sweeter than any photo can convey. It fits in your hand with a rightness that's hard to explain but absolutely perfect. As I passed it along to my friends, they all said the same thing: "Oooooooooh."

As we walked away, any questions about whether it's worth $249 or not simply faded. And suddenly the iPod seemed so... big.

So iPod may be like the big Golden Retriever you beg your parents to buy... but iPod Mini is the cute little puppy that follows you home.

Seeing is believing.

09 Jan 2004 | antfarmer said...

I think everyone here is getting it all wrong... I do not believe that the iPod Mini is an attempt (honestly) at going after the lower-end market. It's a lifestyle device, it looks cool - It is created to extend what the original iPod became: A fashion accessory. The purchase choice will not be between an iPod and a Mini, but rather the Mini will be a must-have accessory to the other iPod. You can rationalize it by arguing that the 2 devices are complimentary to each other in terms of when & where you use one over the other... But really it's an emotional thing - I guarantee that in 6 months, hallways in every high school in the country will be filled with armband-clad kids in 5 colors. And because the iPod is a status symbol, Apple will not do anything with it's price to devalue the brand.

09 Jan 2004 | indibluecoop said...

Does anyone know if the mini is water/weather resistant? It would be nice to take it running in the rain without worrying about damaging the device. If it is weather resistant, does anyone want to buy a Rio Sport 35 for cheap???

Like antfarmer said, the mini will be a nice accessory to my ipod 20.

10 Jan 2004 | pb said...

Comparing the mini to the Cube is unwarranted. The Cube was *more* expensive than the equivalent G4 and over *twice* as expensive as the entry level iMac (which included a display).

Apple doesn't yet need to cater to the overly-price-sensitive consumer. That person is familiar with being left out in the beginning.

Steve was in a tough position because he was introducing a product that needed to be seen and touched up close and he was revealing an unexciting price. I think it's taken a few hours and days for the merits of the mini to be rightfully understood.

10 Jan 2004 | John Harrington said...

Some of us don't even have 4 gigabytes of music. The smaller size of the mini makes it worth the cost. I probably own around 3 gigabytes of music. I like about 1 gigabyte of the songs I own. Why is it that so many people think everybody needs 15 gigabytes?

The mini is competing with other small MP3 players that hold 1/8 the amount of music for the same price. IRivers 512mb player is actually more expensive.

There is no question that Apple's new Ipod Mini will dominate the market for small MP3 players.

10 Jan 2004 | John Harrington said...

Some of us don't even have 4 gigabytes of music. The smaller size of the mini makes it worth the cost. I probably own around 3 gigabytes of music. I like about 1 gigabyte of the songs I own. Why is it that so many people think everybody needs 15 gigabytes?

The mini is competing with other small MP3 players that hold 1/8 the amount of music for the same price. IRivers 512mb player is actually more expensive.

There is no question that Apple's new Ipod Mini will dominate the market for small MP3 players.

10 Jan 2004 | bud said...

I've been reading all these comments of folks saying the mini is too expensive, that everyone should just by a 15gig ipod for $50 more, and thats fine and all but for me...I've been looking at buying an mp3 for damn near a year, I'm sick of using a walkman on runs, skiing, and at the gym.
I've read many complaints about how the ipod is too big to easily be carrying along on runs or strapped to your arm in the gym, and I've read folks complain about how much money they've blown on more flash memory for their crappy 256mb players, and how the rio 1.5 gig (and 4 gig)player has such crappy software that its a pain to navigate through compared with the operating system on the ipods.
I had been hopeful that the ipod mini was going to be cheaper but I'm willing to pay to get exactly what I've been looking for...a player that I can put way more than eight hours of music on and is substantially smaller (41% smaller by volume) than the ipod.
Some folks want to carry their entire music collection around, and thats fine, I think I'll be quite happy with 1000 songs. And if the time comes that I want to carry all my music with me, I bet there'll be a 20gig version of the ipod mini in a few years.

10 Jan 2004 | Pinger said...

I love how everyone is saying the iPod mini is too expensive, yet in the same breath they are saying I should spend $50 more and get the 15 gig. Uhh... It's too expensive but then I should spend more? Yeah, OK.

10 Jan 2004 | andrew said...

When Apple gets around to making the (larger) iPod not just a music-player but a way to carry your whole computing environment around with you, than the iPod Mini-as-pure-mp3-player will look more appropriate.

10 Jan 2004 | Jozi said...

the regular ipod is deffinatly for me capacity wise but it's to big!

i'm glad apple are bringing out the mini ipod, it's what i've been waiting for.

i use minidisc on a daily basis and i wont give in to an mp3 player until the become smaller than a minidisc player (wich are quite small now days) but i might just now with the new ipod

ok 4 gig isnt much (but better than what flash mp3 players give you) and i dont think it will hold everyones music collection, not mine anyway, but swapping music on and of the player now and then isnt so bad, is it???

11 Jan 2004 | house of real estate said...

I can't see this going anywhere. They'll get a few sales, but I think people will cough up the extra $50 for a real iPod. Still good for Apple, but bad for iPod mini sales.

11 Jan 2004 | nino said...

Wait till next year - never buy a product when it is first released.

12 Jan 2004 | Nautilus said...

Well, I just bought an iPod mini, and I'll lay out the reasons for those who recommend that EVERYONE buy the 15gb because it is a much better deal.

The 4GB equates to around 70 hours of music. There is no way that I will ever go anywhere where I will listen to all seventy hours of music without a chance to swap songs with my PC. And if I ever did (a very long vacation, perhaps), by the time I got to the end, repeating the 70 hours wouldn't be a horrible thing: I'd only have the 1000 songs that I really like on there.

So who here has more than 1000 songs that they absolutely love? If you don't love or at least like all the songs on your player, why are they there? So that you can listen to the songs that you don't like while trying to relax on vacation or commute?

It's not all about space. If it was, you shouldn't buy an iPod at all. Look at this deal, with the 60gb Creative player:
http://us.creative.com/products/product.asp?category=3&subcategory=21&product=9288
Going by just hard drive space, that's the best deal yet. 3x the space of the 20gb iPod for the same price - anyone care to list reasons why everyone shouldn't fork out for one of these?

And for those who say that the iPod mini isn't competitively priced, it IS. The Rio Nitrus 4GB that is coming out will be $250, and the Creative 4GB MuVo2 is going to be $300.

12 Jan 2004 | scottdye said...

Steve has pulled the whole reality-distortion field over our eyes again:

In his presentation, he discuseed the current iPod competition as being around $100-150, and then you end up paying an extra $50-100 on a bigger card, so you end up paying around $200 anyway. Essentially he's saying the other devices are a "bait and switch" technique (or "bait and upsell" more accurately)

Then he introduces a device thats STARTS at $50-100 more than the "upsold" product. Oh, yeah, to get the ipodmini strap costs more (upsell), and oh, yeah if you really think about it, another $50 gets you a much bigger capacity iPod.

And all the people here are talking about is one ipod over another. But for the average consumer, they have no intention of starting out at $250-$300. Most people that see my ipod immediatly say it's "too high", even when they see how much it can hold and ooh and ahh over it.

There is a reason the $100-$150 price point, with later upsells, works. They aren't better products, they are more reasonable price points for the average consumer's understanding of what they (think) they need.

13 Jan 2004 | Brad H said...

This is a true consumer machine. Just like the "flavored" iMacs. It IS NOT DESIGNED FOR MACHEADS (i.e. those that debate such things on Websites -- yes, that includes me). This is for my friend Jennifer who has less than 1GB of music on her 5 GB iPod. She would love one of these. To her it's cute, easy to exercise with and has more than enough storage for her. She'll NEVER use it as a data drive. She'll NEVER use the calendar function. But it does everything she wants, and it's a "cool iPod" in a cute color. It's fashion AND function. SOLD!

13 Jan 2004 | Joshua Kaufman said...

To Brad H's point: We care about the disk size and the price because we're geeks. Apple isn't marketing to us, they're marketing to the hipsters who care more about size, portability and color. People will buy. Oh yes, people will buy.

Anyways, this is new tech. You didn't honestly think Apple would release the mini with a 150 price tag, did you? In a year, I predict the same model will be $150. This is how consumer electronic pricing works. If I'm wrong, then we have something to complain about. Until then, be happy with your geek selves.

14 Jan 2004 | Question said...

If the iPod can be used as a storage device, can I just plug it into my Uni's PC running XP and upload files straight away? I'd like to think that the >5GB device can be used to easily transfer files from T1 computer lab to the PC at home. If it requires any software installation... I think I'll skip. Flash based USB mp3 players do this at a fraction of the price.

15 Jan 2004 | Cowboy said...

I really liked reading this blog though I am not too much into ipods (in fact had to go and find out what an ipod is... Sorry - for being ignorant)

19 Jan 2004 | Brad Hurley said...

According to Macworld Central, the iPod mini is now the top-selling item in the Apple Store.

22 Jan 2004 | Sarah E said...

In response to pb: "08 Jan 2004 | pb said...
Here's a hypothetical: Apple launches the iPod mini instead with Cornice's 1.8 GB drive" - the iPod already uses a 1.8 inch drive (Toshiba's) so you wouldn't be able to get more mini without moving to a smaller drive - so far the smallest HDDs only have 4GB capacity...

23 Jan 2004 | DaveE said...

Sometimes people just feel the need to do odd things. Hardcore rice-burner drivers will spend 6 hours cutting a 4 pound piece of metal out of their dash to lighten the car and improve performance. Hikers will buy a $30 fork that weighs 1/2 oz. less than a normal fork so they can hike that extra half mile.

These are the people who will feel the call of the "mini". Besides, who in their right mind is going to hike for more than 70 hours? For those ultra dull family functions you don't need 10,000 songs to get you through, but on the other hand, if you are in charge of music for a party, 10,000 songs gives you a mighty fine selection. The entire second Lord of the Rings movie was moved from place to place on an ipod. Almost got stolen too, but thas another story.

Its all person to person. Some people like red, some blue. Some people with get one just because they can, others because they have a need. In the end the only thing that matters is that Apple gets all the money!

25 Jan 2004 | Josh said...

You know, I've been looking and researching for a new mp3 player for quite some time. I've been "ani-apple" my whole life, but the new ipod mini really caught my attention. Because I've been researching all sorts of different mp3 players, the first thing I did when I saw the ipod mini, was compare it to the other players. The truth is, is that the ipod mini really blows away the competition, even in price. For instance, the Sony NW-MS70D at 256 mb is exactly the same price as the ipod mini!! The iRiver iFP-395t at 512 mb is closer to $300!! Granted, both the Sony and iRiver are smaller in size. But that warrants the question, what are you really purchasing when it comes to mp3's; size or storage? I think that apple has done a great job giving you both size and storage, for a reasonable price. Just because I have thousands of songs on my computer, doesn't mean I want to carry every single one around with me. 4gb, in a package about the size of a business card, with awesome features for $250, I'm sold. Sure, compared to the regular ipod, it kind of sucks that you can spend $50 more and get 3x the memory. Compared to what else is out there on the market, the ipod mini blows away the competition. You just have to ask yourself what's more important, size or storage. For me, it's the combination. I want something small enough so that I can take with me to the gym, or have the memory to keep my occupied on a 4 hour plane flight. The ipod mini allows me the versatility to do both, which is well worth the pricetag.

26 Jan 2004 | Stephen said...

"I would argue the average high school/college kid has over 10GB of music on their computer and countless other CDs copied from friends - all legalities aside, it's the truth."

Just some random facts that might be of interest gathered from the currently sharing users in iTunes on my school's network. Since the different specs are 4, 15, 20, and 40, I did it by how many of each would be sold if people bought what they needed for their entire current electronic music collection to fit. Out of 25 users, 15 minis would be sold, 6 15 GBs, 3 20 GBs, and 1 40 GBs. And I know a heckuva lot of people who would pick the 4 GB colored ones over a plain white one. In fact, I had two or three people in a conversation about my (20 GB) iPod ask when Apple was coming out with colored ones.

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