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iPod mini redux

Filed in: Apple, consumerism, music, Sat, Feb 21 2004 21:28 PT

Here’s what I said about it in January:

[I]t’s not hard to see why Apple would never release a $100 player: it’s a high-risk, tiny-margin endeavor that runs counter to their own value proposition and would ruin the brand power they have at $300 and up.

So, what to do with this little goody, the iPod mini? They could have priced it at $199, but that would have put them head-to-head against the 256MB devices Jobs snickered at during his presentation. Better products attract a premium, and it’s completely reasonable to place that premium at $50 above what is already there. So there it is, at $249.

I found an article this week which says, basically, that I’m right. 🙂

iPod mini costs $249 in the US – that’s just $50 less than the low-end iPod which offers a gargantuan 15GB capacity. Press reports before the announcement of iPod mini had speculated Apple would offer a sub-$100 device to compete in the flash-based music player market. The $249 price-tag Apple then announced generated a wave of criticism from users who believe that’s too expensive. Does Apple think the price is right?

[iPod marketing manager Danika] Cleary clearly does. She said: “We really do think the price is right, and that’s because of a couple of reasons. The first is: when you really look at the flash-based players on the market, for around $200 you can get one – but for just $50 more you can get 16 times the amount of music in a package that’s not much bigger than any of the top-selling players in that category.”

More from OEMer Edgar Matias, in the same article:

“The Mac faithful do not generally understand retail. They argue that if you can get a higher-capacity iPod for just $50 more, why would anyone get an iPod mini?”

“Ignoring all other factors,” he said, there is one class of customer who almost always buy the cheapest available option – gift givers. And for these customers iPod mini is an absolute win. From a merchandizing perspective the product’s a stroke of genius,” he said.

This is just your basic I-told-you-so message. I like to prove from time to time that I’m evil enough to be in marketing.

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