This week in Apple

It's harvest time in Apple country, and the season's new crop includes a diminutive new iPod to replace the popular Mini, as well as an iTunes cell phone.

Both were unveiled at a much-hyped press event in San Francisco this week.

The new iPod Nano, which is thinner than a pencil and roughly the size of a business card, uses flash memory rather than the small, spinning hard drives used in Minis. It replaces the beloved Mini line--Apple's best-selling version of the iPod--and costs more per gigabyte than its predecessor.

The 2GB Nano sells for $199 and the 4GB Nano sells for $249. The 4GB Mini sold for $199 and the 6GB version sold for $249.

Extending the iPod/iTunes franchise into a new market, Apple and Motorola also unveiled the Rokr, a color-screen cell phone that can hold music downloaded from iTunes.

The product had been expected since July 2004, when Motorola and Apple announced plans to collaborate on a music-capable phone. The Rokr can hold 100 songs and will be available in Cingular stores and online for $249.

News of both new products, as well as an updated version of iTunes, got CNET News.com readers weighing in. Many, like "Paul R," were impressed with the iPod Nano--its size, its lack of moving parts and its color display. "What's not to like?" he asked.

But others, such as self-described "Mac-head" David Thomas, wondered whether Apple "jumped the gun" in eliminating the Mini because the Nano might be too small to be user-friendly. The Mini "had to be the most popular version because it was the best ergonomically," he wrote.

Many readers were let down by news of the Rokr phone, which they said wasn't news at all. Reader David Dudley flashed back to around 2000, when Samsung released a phone that played MP3s, he wrote. "The point is--playing an MP3 on a phone is nothing new and has been done before. The difference here is that Apple is bringing it to the masses with a bigger bang," he wrote.

The point is--playing an MP3 on a phone is nothing new and has been done before. The difference here is that Apple is bringing it to the masses with a bigger bang."
--David Dudley

But by late Thursday night, the majority of the almost 2,300 voters in a News.com poll said cell phones doubling as music players make "the perfect combo."

The two new music players introduced by Apple Computer on Wednesday are not only smaller than the existing iPod Minis, they probably cost more to make, too. By using flash memory rather than miniature hard drives, Apple likely increased its component costs for the Nano, said analysts.

Other analysts were debating whether the time is right for more mobile phone/digital music player hybrids.

Sony followed the Apple hype by announcing Thursday that it will sell advanced Walkmans later this year, aiming to move out of Apple's shadow in a market the Japanese company created a quarter of a century ago.

Does anyone think the price is too high?

The new iPod nano looks great. Especially the black model. Isn't $249 a little bit pricey? I know I know it is using flash memory instead of a hard drive. When did micro hard drives get so cheap? When did flash memory get so expensive? Didn't Apple corner 40% Samsung's capacity? That didn't warrant a significant discount for such a volume purchase? Apple normally can justify higher prices on their computers because they are produced in lower volumes than say Dell. These days almost all of the internal components are the same commodity items found in PC's. The prices are still much higher. I am a vet of Sun during its glory days. I have seen them price themselves in to the $3 per share world. Why does Apple to continue to price their products at such a premium? With the iPod, this is a whole new ballgame. They are able to sell millions and millions of these cool little gadgets. And they sell the music for them too! They are the leaders this time around. Am I the only one who does not understand their "boutique" approach?

[lkrupp]

Margins are razor thin

http://news.zdnet.com/2100-1040_22-5853497.html

I don't know where you are coming from on this but Apple's profit
margin on the iPod nano is razor thin. Check next time before
jumping on the "Apple charges too much bandwagon."