Apple speaks on iPod mini pricing
Macworld spoke with Apple’s iPod worldwide product marketing manager Danika Cleary as the company prepares to ship its new iPod mini in the US on Friday.
Apple has already taken 100,000 pre-orders for the iPod mini, the company announced yesterday. Apple’s senior VP worldwide product marketing, Phil Schiller, described response to the new product as “off the charts”.
The 3.6-ounce, 4GB-capacity product is aimed at the high-end of the existing flash memory-based music player market, but offers more capability than existing products in that market.
As well as a higher capacity and award-winning design, the cross-platfom iPod mini uses the same connector as third-generation iPods. This means that existing third-party peripherals should work with the new product, which can also be used as an external FireWire disk, Cleary confirmed.
Cleary told Macworld: “The iPod mini is smaller and at a slightly lower price. It’s very fashionable, so it may appeal to women or younger people who may not have considered an iPod previously.”
iPod mini costs $249 in the US – that’s just $50 less than the low-end iPod which offers a gargantuan 15GB capacity. Press reports before the announcement of iPod mini had speculated Apple would offer a sub-$100 device to compete in the flash-based music player market. The $249 price-tag Apple then announced generated a wave of criticism from users who believe that’s too expensive. Does Apple think the price is right?
A question of cost
Cleary clearly does. She said: “We really do think the price is right, and that’s because of a couple of reasons. The first is: when you really look at the flash-based players on the market, for around $200 you can get one – but for just $50 more you can get 16 times the amount of music in a package that’s not much bigger than any of the top-selling players in that category.”
Size matters, she stressed: “In terms of what people are buying, competing products are not really much smaller than the iPod mini – and in some cases they are larger than it. The size and capacity make iPod mini worthwhile.”
Apple’s market-leading iPod has generated its own developer community. Edgar Matias, president of Matias which produces the iPod armor product, had a new twist on the long-running discussion over price: “Despite all the whining about the price from the Mac faithful, the iPod mini will be a spectacular success for Apple. It is well-priced and that will only go lower with time.”
Praising the form factor, which Matias said he: “found to be ideal for portable handheld devices – small enough to fit in the pocket, but still big enough so you can operate the controls”, he predicted “the iPod mini will prove all the naysayers wrong.”
He continued: “The Mac faithful do not generally understand retail. They argue that if you can get a higher-capacity iPod for just $50 more, why would anyone get an iPod mini?”
“Ignoring all other factors,” he said, there is one class of customer who almost always buy the cheapest available option – gift givers. And for these customers iPod mini is an absolute win. From a merchandizing perspective the product’s a stroke of genius,” he said.
Europe pricing still in flux
While US customers will get their first chance to get their hands on Apple’s newest slice of music player genius from 6pm on February 20, punters in Europe will have to wait until April. And once again, the price has emerged as a potential sticking point – Apple wants to charge UK customers £199 (including VAT) – the equivalent (at today’s exchange rate) of $379.49, UK customers have pointed out.
Apple UK sources have confirmed that the products £199 price-tag may change once it ships in April.
Cleary clarified the situation: “We will set the international pricing – dependent on currency exchange – closer to when the product ships in April,” she said.
Apple’s iPod range is emerging as one of the most successful consumer electronics products yet – but the consumer electronics market operates at a high rate of change. Macworld asked if Apple is ready to deliver the rate of change required to maintain its market advantage.
Cleary responded: “Oh, we certainly think so – if you look back at, say, the last two years, we have innovated at a pretty rapid pace, having introduced three generations of product and a brand new product within just two years, we certainly see ourselves at the front of the space, not trying to catch up.”