Apple cuts iPod prices to grab market share; analyst estimates 35 million iPods shipped by year end
Wednesday, June 29, 2005 - 08:54 AM EDT"Apple Computer cut prices on its iPod digital music players, added color screens to some models and began supporting downloadable radio programs to defend its lead against competing players and music services," Connie Gugliemo reports for Bloomberg News. "Apple is selling two versions of the white iPod: a 20-gigabyte version now with a color screen for $299 and a 60-gigabyte color model that was cut to $399 from $449. Apple also dropped the price of the 1-gigabyte iPod shuffle to $129 from $149, the company said Tuesday."
Gugliemo reports, "Chief Executive Steve Jobs is working to maintain the iPod's lead in the so-called MP3 device market in the U.S. and increase shipments as prices drop amid competition from Creative Technology Ltd. and Dell Inc. The average iPod selling price fell 42 percent to $191 last quarter, and Apple said it expects lower-cost models such as the iPod shuffle to weigh on margins. 'They're lowering prices to grab market share, and they should be able to maintain the same profit margins at these lower prices because memory costs have been declining,' said Piper Jaffray & Co. analyst Gene Munster, who predicts Apple's iPod shipments will top 35 million by the end of the year."
Full article here.
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So, one could argue that they are lowing prices due to falling memory costs instead of trying to grab market. Since, really, what competition?