“The hefty price tag for the multihued player has left many scratching their heads and wondering what insane devotion to high margins could produce such a price point for a device that Apple is hoping grabs them another 20% of the market. People have been quick to point out that another US$50 will buy you an additional 11GB of storage with the 15GB iPod model. They are right. Compared with the current iPod offering, the iPod Mini is a disappointment in terms of price. However, those who make such comparisons are missing the point of the business card sized player. It is not meant to be an alternative to the iPod, but to the high-end flash-based and other small hard drive-based players. Let’s look at some numbers,” Eric Bangeman writes for Mac.ars.
Bangeman provides a nice chart that basically shows, “US$249 for 4GB is a lot of money when you can get 15GB for US$50 more. US$249 for 4 GB is a fantastic deal when the same coin gets you a mere 512MB of flash-based music storage. The latter is the comparison Apple wants buyers to make when considering the iPod Mini. Time will tell if its a compelling one.”
Full article here.