Apple Shuffles IPod Lineup as It Unveils Musical Phone
As iPods get smaller, Apple Computer Inc. just seems to get bigger.
The innovative computer maker Wednesday introduced a tiny new version of its wildly popular iPod as it strives to extend its dominance in digital music.
The iPod nano debuts at a time when Apple has sold nearly 21 million iPods and some analysts wonder whether today’s must-have gadget is nearing the peak of its popularity.
“I wonder about that a lot,” said Shaw Wu, an analyst at American Technology Research. “I do think we’re closer to saturation than before.”
But others hailed the iPod nano -- which weighs less than 2 ounces and is thinner than a pencil -- as sufficiently cool to give Apple at least another year’s worth of iPod-powered growth. They were less effusive, though, about a new phone that plays music, saying it lacked the high-tech hipness of iPods.
For Cupertino, Calif.-based Apple, keeping the iPod franchise fresh is crucial. Sales of iPod have climbed every quarter since the summer of 2003 -- 6 million units were sold from April to June of this year. Apple’s iTunes Music Store is the top seller of legal online downloads. Apple shares have gained 30% this year as iPod boosts revenue and profit.
Apple executives predict there’s still plenty of room for growth; just 6% of Americans own an iPod.
“The market has shown remarkable growth to date, and we’ve seen no reason it won’t continue to grow at a tremendous pace,” said Phil Schiller, an Apple senior vice president. “We’re just beginning to tap into those who want portable music. It’s not a speculative market.”
Wednesday’s unveiling -- done in Apple’s typically dramatic and star-studded style at San Francisco’s Moscone Center -- continued the company’s strategy of aggressively shuffling the iPod product line to lure new buyers and keep current owners coming back for more.
For instance, Apple discontinued the multicolored iPod mini. The new nano -- whose name denotes one-billionth -- is available only in black or white and uses flash memory rather than the hard drives that power standard iPods. Flash memory has no moving parts and is less taxing on batteries, giving the nano an advertised battery life of 14 hours.
In that way, the nano is similar technologically to the iPod shuffle, which is Apple’s cheapest player. Unlike the shuffle, though, the nano includes a color screen and can display photos. A 2-gigabyte version, which holds 500 songs, sells for $199 and a 4-gigabyte version, which holds 1,000 songs, goes for $249.
The iPod nano “will be the hottest tech toy available for Christmas,” said Tim Bajarin, chief analyst at technology consulting firm Creative Strategies. “The first thing I thought was they were defying physics because it’s so small and slim, and so powerful.”
The raves of analysts and fans are indicative of how iPod has woven itself into popular culture. Madonna made a guest appearance via satellite at Wednesday’s event to promote that iTunes would be selling all of her albums online. Rapper Kanye West performed for the crowd. And Apple Chief Executive Steve Jobs said 30% of new cars sold next year would include adaptors that allowed the iPod to be played through the stereo system.
Speculation swirled for weeks about what Jobs planned to introduce at Wednesday’s event. News about the introduction of the iTunes phone -- a joint project with Motorola Inc. -- broke last week, but the iPod nano took most people by surprise.
“It’s definitely a step further along the technology curve than we were expecting,” said Gene Munster, a computer analyst with Piper Jaffray. “Put the nano up next to an iPod mini and the mini looks like a clunker.”
The iTunes phone -- called Rokr -- won fewer kudos. Some questioned the need for a music-playing cellphone, given how petite iPods have become. Worse perhaps for Apple, though, was that the Rokr just didn’t seem cool to some who saw it.
Said Wu: “It’s OK. It’s certainly not as cool as the nano. I wasn’t blown away.”
