Expect a lot of socks at Apple’s event Tuesday. IPod Socks are the sort of brand building fluffthatApple talks about when it isn’t changing the fate of humanity.
A lot of people are guessing what Apple’s“Let’sRock”presentation in San Francisco will be. That’s theusualpre-showgame. Of course, most of the guesses are about thesort ofthingthat would go unnoticed when any other company makesthem:aslightly different shape for the iPod, “trippy” newgraphicsforiTunes, and no doubt all sorts of other little tweaks toitsiPodlineup. (There isn’t much noise that Steve Jobs will havemuchtosay about the Mac line Tuesday, but he’s been known tosurprise.)
One key thing to watch are the price points.Apple’snormalmodus operandi is to slowly increase thevalueandfeatures of its product line, but to keep the pricessteady.
The base model of what is now called the iPod Classicwas$299from 2002 to 2005, and it has been $249 ever since. Inthattime,the storage capacity increased from 5 gigabytes to80gigabytes.
Similarly, the Nano was introduced in 2005 with a 2gigabytemodelthat cost $199. The next year, Apple introduced a1-gigabyteversionfor $149, and the base price for the Nano hasstayed at$149 eversince, although the capacity is now 4 gigabytes.
Since the sales of stand-alone music players are slowingdown,thequestion facing Apple is whether to keep the $149 pricepointforflash-memory players and the $249 price for hard-driveplayers.Rightnow, Amazon is selling SanDisk flash players with 4gigabytesfor $84and with 8 gigabytes for $120. Microsoft’s newline of Zuneflashplayers offers a 4-gigabyte model at $129 and an8-gigabytemodel for$149.
It wouldn’t be surprising to see similar price cuts fromAppleinan effort to keep volume up. Instead, Apple could trytoaddfeatures to maintain the existing price points. MicrosoftaddsaWi-Fi connection and an FM radio to its Zune models,generallyatthe same price points that Apple uses. To my mind, Wi-Fisync isarather handy feature and it’s the only thing thatMicrosofthasadded to the music player world that I wish Apple wouldcopy.
The other interesting iPod question is what Apple does tokeepthehigh end attractive. It has been pushing the iPod Touch—essentiallyan iPhone without the phone, G.P.S. chip, speakerandcamera — whichstarts at $299.
This is a far less mature product line, and there is alotmoreroom for innovation. There are lots of other potentialfeatures—both in hardware and software Apple could add. A cameraisoneobvious thought, for example. A G.P.S. chip isanother.Anotherpossibility is a version of the Touch with a harddrive,mergingthe two higher end lines of iPods.
But here too, don’t get dazzled by features. Anythingispossiblewith enough money. The big question is the pricepoint:Does Applehave the confidence in its innovation to makepeople pay$299 thisChristmas for its very best media player line?Or doesthe sloweconomy, combined with greater competitionfromsubsidizedcellphones, mean it has to offer even more for lessmoneyto keepthe socks on its iPod franchise?
Posted by The New York Times
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