January 11, 2005 1:09 PM PST

Apple debuts new, low-priced iPod

As widely expected, Apple Computer on Tuesday introduced a new version of its popular music player--the iPod Shuffle, priced as low as $99.

Based on flash memory, rather than the more expensive computerlike hard drives that have been the centerpiece of all other iPods, the new player is aimed at the low end of the market, relatively untraveled territory for Apple. It comes in two sizes. The $99 version has 512MB of storage and holds about 120 songs, and a $149, 1GB version holds about 240 songs.

Unlike most similar devices, the Shuffle has no display screen to show songs or playlists; it consists only of a slender white rectangle with the trademark iPod navigation wheel on one side. The company is instead highlighting the random-play aspect of the device, although this is a common feature on virtually all MP3 players.

"iPod Shuffle is smaller and lighter than a pack of gum and costs less than $100," Apple CEO Steve Jobs said in a statement. "With most flash-memory music players, users must use tiny displays and complicated controls to find their music. With iPod Shuffle, you just relax and it serves up new combinations of your music every time you listen."

Although widely expected following a series of leaks, Apple's move into the flash market does mark a departure from the company's previous high-end strategy. Jobs has previously dismissed small-capacity, relatively inexpensive MP3 players as products given as gifts and rarely used.

The flash market overall has been larger in terms of units sold than the hard-drive market, and remains very strong overseas. The largest share of the U.S. retail market over the past year belongs to iRiver, followed by Rio and RCA. Other players include Nike/Phillips, Samsung and Creative Technologies.

Other companies have been making their own new approaches to the low end and middle of the music player market as well. At last week's Consumer Electronics Show, Rio introduced a new 2.5-gigabyte player called the ce2100, priced at $199.

The holiday season proved a successful one for some of these Apple rivals. Creative Technology said Tuesday that it had sold more than 2 million MP3 players in the quarter ending December, prompting the company to raise its yearly revenue guidance substantially.

However, Apple remains the dominant player in the hard-drive-based MP3 player market, accounting for more than 80 percent of sales between October 2003 and October 2004, according to the NPD Group. The company said Tuesday that it had sold more than 4.5 million iPods in the fiscal quarter ending Dec. 25.

Analysts said the new device will help Apple capture a new segment of the market without cutting into the older iPod's growth.

"The shuffle is where it needs to be--it is very unlikely to cannibalize the iPod while allowing Apple to be more aggressive with other flash players," said NPD Techworld analyst Steve Baker. "It also allows Apple to tap into overseas markets better where people are more sensitive to price points than here in the U.S."

The company's share prices have soared from $40 to nearly $70 in the last three months, largely on expectations of continued iPod sales growth and associated positive effects on the rest of the company's business. The Prudential Equity Group said Tuesday that it expects Apple to ship 15 million iPod units in fiscal 2005 and 22.5 million units in fiscal 2006.

The decision to eliminate the navigation screen, which will make it more difficult to find a specific song, drew mixed reviews from analysts. The device still retains a skip-and-rewind button to move forward and backward through a playlist, and a switch to toggle between shuffle and in-order play.

"It is likely that they omitted the screen in order to keep (the) retail price down," said IDC analyst Susan Kevorkian. "But looking to next-generation flash players, they're going to need to add the ease of navigation that comes with a display."

Competitors also noted this feature as a competitive advantage for their own products.

"We have seen this in the industry before, where we've gone down the path of blind (user interfaces), and customers don't respond well," said Dan Torres, vice president of product marketing for Rio. "There is that comfort where customers will look at the screen and say, 'What song am I on,' or 'What do I have queued up?' Navigation is important visually as well."

The introduction of the flash iPod may also give Apple's iTunes store a boost. Previously, none of the flash players on the market could directly play songs purchased from Apple's digital music store, although customers could burn the songs to a CD and then re-rip them to MP3 format.

By offering a lower-priced player, iTunes could attract a new segment of the market, one that previously only had access to rival download services such as Napster, Virgin Digital or MSN Music.

14 comments

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Talk about innovation...
No Screen? Apple is kidding right? Give me a break.
Posted by 201293546946733175101343322673 (722 comments )
Reply Link Flag
No Screen ?
I have been waiting for the Flash IPod for so long to see this?

No Screen... No Buy, period!

Seems like I have to buy the regular IPod.
Posted by techpr (4 comments )
Reply Link Flag
You Guys Don't Get It
I can only assume that those of you complaining about he lack
of a screen have used neither an iPod or iTunes. The random
shuffle of self-selected playlist is transcendent. Most people I
know listening to their library of music love the unpredictable
presentation of their music. Why do I need a screen to tell what I
am listening to? I already know. I picked the songs in the first
place. The controls are so intuitive, I don't need a screen to
confirm my actions. Beyond the screen (or lack of one) you are
ignoring the integration with iTunes. The new Autofill function
of iTunes automatically selects groups of songs gauged to fit
exactly on the Shuffle. Addtionally, through the Preference menu
you can allocate how much memory is partitioned for iTunes use
and how much is reserved for data. Yes, you can use the Shuffle
as data memory stick as well (how many of those have screens).
A hallmark of Apple products for decades has been simplicity.
And simplicity is not simple or easy to accomplish. Apple doesn't
always succeed, but they achieve simplicity better and more
often than just about any other company on the planet. Albert
Einstein said that all things should be made as simple as
possible, but not simpler. The iPod Shuffle hits the mark. I
recommend kneejerk detractors take a good close look at the
details of this product before writing it off. It looks simple, yet is
very sophisticated in its capabilities.
Posted by Greg Sparkman (82 comments )
Link Flag
Very Cool at Right Price
I disagree with the previous posts. This is a cool product at the right price. Why do I need a screen? And I won't spend $499 for an iPod. The shuffle is portable, cheap, and looks nice.

American Report
<a class="jive-link-external" href="http://americanreport.blogspot.com" target="_newWindow">http://americanreport.blogspot.com</a>

<a class="jive-link-external" href="http://americanreport.blogspot.com/2005/01/apple-debuts-new-low-priced-ipod-cnet.html" target="_newWindow">http://americanreport.blogspot.com/2005/01/apple-debuts-new-low-priced-ipod-cnet.html</a>
Posted by (6 comments )
Reply Link Flag
Wrong
No screen, and no only basic controls make tis the worst value on the market. For 179.99 at my loacl frys Electronics I cna get a 30 Gigabyte Nomad, which has all the featurers of a full blown ipod plus more audio codecs and a microphone, and USB 2.0

The apple brand will fizzle out eventually.
Posted by wazzledoozle (288 comments )
Link Flag
No choice but random play ?
For me I do not find the display / controls on my creative flash player at all complicated. Plus I want to choose the music I want to listen to at a particular time. Not some random playlist that was a feature introduced 20 years ago for CD players that never really caught on.
Posted by david_a_c (1 comment )
Reply Link Flag
There's another choice
Please see my response concerning this at: <a class="jive-link-external" href="http://" target="_newWindow">http://</a>
news.cbsi.com/5208-7354-0.html?
forumID=1&#38;threadID=4129&#38;messageID=24001&#38;start=-187
Posted by dejo (182 comments )
Link Flag
www.apple.com/ipod
Go to the source &#38; READ about the iPOD Shuffle...
Posted by Llib Setag (951 comments )
Link Flag
New iPod implant
New iPod implant

Addressing a standing-room only crowd at MacCon,
Apple CEO Steve Jobs announced the newest member
of the iPod family: the iPod implant. Smaller than a stick
of gum and made of a gleaming, sterile, and
biochemically inert polymer, the iPod implant is
inserted directly into the brain between the parietal and
occipital lobes. Intended to expand Apple's already-
dominant position in the MP3 music player market, the
iPod implant is clearly aimed at Apple loyalists who
eagerly snap up any of the company's experiments.
The fact that the player lacks a display screen, has no
expandable memory, and requires major surgery does
not seem to deter the Apple faithful, many of whom
were seen lining up at neurological clinics shortly after
Jobs presented the new iPod as his famous "one more
thing" keynote closer.


"I want to be the first to get one," said one fan shortly
before the anesthesia took effect. "It's the closest you
can get to actually being in Steve's reality distortion
field." The iPod implant works similarly to other
products in the iPod family, playing MP3 and AAC-
encoded files and featuring the iPod's trademark
navigation wheel--which is designed to protrude from a
hole cut in the skull along the inferior border of the
squamosal suture. It syncs with iTunes playlists
wirelessly, using either Bluetooth or Airport Extreme
technology, and allows customers to purchase 99-cents
songs from Apple's iTunes service just by thinking
about it. Also, the iPod implant forgoes the need for
those omnipresent white earbuds as it transfers sound
directly to the middle ear via bone induction. "It's perfect
for joggers or commuters or anyone who just tends to
'zone out' at any time for no apparent reason," said an
Apple product specialist, who claims he's had two
implanted (the minimum allowable for Apple
employees). He further noted that, in addition to iTunes
music, the new iPod implant could also receive product
announcements directly from Apple to "take the
guesswork out of your purchasing decisions."

While the iPod implant is certainly stylish and offers
excellent sound quality, it is unclear how well it will fare
among the numerous low-cost consumer options
available for piercings and ornamental bodily
mutilation. Toward the end of the afternoon throughout
the exhibit hall, one could spot dozens of happy new
implant owners by their tell-tale head-bobbing and foot-
shuffling, which Jobs assured the crowd was only a
temporary post-surgical effect. Time and again, Apple
has proven that it knows what its customers want even
better than they do, uniting form, function, and premium
pricing into technolust fashion statements. Judging by
the initial surge of enthusiasm for the new iPod implant,
it's not out of the question that horseshoe-shaped
cranial scars may be all the rage this year.




-- mattmchugh.com
<a class="jive-link-external" href="http://mattmchugh.com/blog/2005-01/index.html#2005-" target="_newWindow">http://mattmchugh.com/blog/2005-01/index.html#2005-</a>
01-12
Posted by mattmchugh.com (32 comments )
Reply Link Flag
 

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