Shuffling up the iPod line
Wednesday, Sep 28, 2011
Last month some folks were speculating that the iPod touch would be on the chopping block, a rumor I disagreed with in my post, "Cancel the iPod touch? Lunacy." Now, folks are suggesting that the iPod shuffle and the iPod classic may be on the chopping block. This would leave the iPods nano and touch as the only iPod devices, adjacent to the iPhone and iPad. Ditching the Classic makes a lot of sense. The last torchbearer of the original iPod's form factor only exists today because its use of a hard drive enables it to store 160GB of media, 2.5x as much as the 64GB Touch, at just over half the price. With the release of iCloud and Music Match, 160GB is no longer needed. Those deep tracks can be downloaded to your device on demand, so as long as you have wifi or a mobile connection you'll have your whole catalog. Eliminating the Shuffle is where things get dicey. It's not an iOS device and it doesn't pretend to be, unlike the Nano who's multitouch UI seems like iOS though it's completely different under the hood. Getting rid of the Shuffle would clean up the product line, but would leave a huge hole in the bottom end. The Shuffle costs $49 but the Nano starts at $149, and $149 is just too high a price for an entry-level music player with no video capability or mobile connectivity. The 16GB Nano is only $30 less than a new Kindle Fire tablet. Could the Shuffle be eliminated next week? Yes. But only if the price of the Nano was lowered a great deal. I would guess that $79 would be the sweet spot, though Apple may keep the price as high as $99. Pricing the Nano at $79 would represent a 47% cut from the current price, but the manufacturing and material costs for a Nano continue to drop, and this would probably still represent a healthy profit margin, while keep Apple's market share at the low end of the product space. If they drop the Classic, I wouldn't expect them to mention it during next week's presentation. If they drop the Shuffle and move the Nano farther down the line, they might mention that. The more interesting question to me is, what is the long term future of the iPod and iPhone? The nano is squarely an iPod, the Touch is an iOS device arbitrarily called an iPod, while the iPhone is not. There's no arguing that the iPod touch is more iPhone than Nano, so at some point the iPod brand needs to either consume, or be consumed by, the iOS brand. But that's probably a strategy for another time. A time which, at the minimum, the nano-class device is a true iOS machine.
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