We all know Apple will introduce its all-new potentially camera-equipped iPod range during its special event this week, now slight evidence has come to light supporting some earlier claims the company may stick it to the competition – principally the Zune HD – by introducing its new products at aggressively lowered prices.
Or it may not. This is speculation and rumour, after all.
What if Apple were to do something like it has done with the iPhone and kept a previous generation model (8GB iPhone 3G@$99) around at an incredibly low price? Sell the iPod Touch 2G without camera, compass, or GPS for $149? Or less.
The new $150 price point would be revolutionary for people who need Email, light browsing, 70,000 apps, music, movies, photos etc on the go. It would also make Microsoft’s $220 entry level also GPS-less/Camera-less ZuneHD a tough sell. (More on the impact of the $150 iPod touch here.)
Marco.org also postulates the following price points, and warns that the iPod classic will be retired (despite some claims it will be updated to match the rest of Apple’s media player products with the inclusion of its own camera.
– $59: 4 GB Shuffle (no changes)
– $99: 8 GB Nano (minor update, maybe with camera)
– $149: 8 GB Touch (3GS internals, camera)
– $199: 16 GB Touch
– $249: 32 GB Touch
– $349: 64 GB Touch
The article, “Touch panel IC quotes dropping fast”, relates that the current price of 3.5-inch touch panels have dropped near 50 per cent, from $16-18 one year ago to $9-11 today. Chip prices on the segment have also fallen, to $2 from up to $5 each. The report cites market sources.
If the trend is one in which key component prices are falling, as production efficiencies bring in cost savings on the one hand, while economic woes cause manufacturers to lower prices to stimulate trade, then Apple does have an opportunity to bring in its next-generation iPods at lower prices.
This could be considered by Apple management to be an appropriate reaction to the slow erosion in iPod sales growth, particularly as it cannibalises its own market with the iPhone.
That the opportunity to do this may exist doesn’t necessarily mean Apple – at heart a premium priced brand – will take the chance. But with Microsoft’s Zune HD set to cost $219 (16GB) when they debut later this month, reducing prices to eradicate Redmond’s price war threat could make some sense.
We’re in the “wait and see” camp.