Rio Exec: Apple has ‘priced themselves out of the market’ with $249 iPod mini

“Is $249 a mass-market price tag for a portable music player? That’s the debate raging in consumer electronics circles after Apple Computer debuted its latest version of the iPod, which hit stores Feb. 20… some observers are concerned that Apple’s asking price for the Mini — which weighs 3.6 ounces and holds 1,000 songs — freezes out many casual music fans who otherwise would be interested in buying the device. ‘I’m disappointed with the price point,’ says a major-label technology executive who had hoped that pre-announcement rumors of a $100 retail price would prove to be true,” Brian Garrity reports for Billboard.

“Certainly, the price point is not stopping curious consumers from lining up to buy the latest iPod. Early demand for the Mini appears to be high, according to the company. Apple reports that it has already received more than 100,000 pre-orders for the product. ‘The response to the Mini iPod has been off the charts,’ Apple senior VP of worldwide product marketing Philip Schiller said in a statement,” Garrity reports.

“Apple is not just comparing the Mini with the standard iPod in its marketing efforts. It is also positioning it as a better alternative to high-end, flash media-based products offered by companies like Digital Networks North America, maker of the Rio line of portable music players. Flash media is a removable storage media used in digital cameras and some MP3 players. Apple iPods, by contrast, are essentially portable computer hard drives. Flash players typically carry only a couple of hours of music, but they also are less expensive, costing $200 or less. Apple’s argument is that for consumers considering pricier flash-based devices, the Mini, which is of rival size and holds much more music, is only about $50 more,” Garrity reports.

Garrity reports, “‘They’ve priced themselves out of the market,’ Richard Bullwinkle, a senior product manager at Rio Audio, told Billboard in an interview earlier this year.”

Full article here.

31 Comments

  1. Sour grapes. I could be biased, but it seems that every advertisement of a PC version of a music player makes a silent and subtle point that it is just a good as the �Real McCoy�, an iPod or a mini. If this were so where are the sales statistics to verify this assertion? All I ever read is opinion and insults. I have yet to see any hard, numerical data.

  2. Funnily I have never seen any hype about the Rio player … At business school no-one talks about anything other than the iPod mini … A biased sample … maybe, but no doubt with-in a year apple will have a 1GB mini selling for around $150 – $200 and then we will see who is out of the market.

    The bottom line is that Design matters, and people are willing to spend the extra bucks to buy not only greater capacity but also the best interface and product design.

    Good luck Rio

  3. Yep, that RIO executive is right, errrr… wait, I just bought my mini about 3 hours ago and I have never taken any portable music player seriously. There’s a reason why we don’t know anyone who owns a RIO product.

  4. “Yeah right! That’s why their 1.5GB player is $199. Hmmm, 4GB for $249 or 1.5GB for $199. ”

    This is the same argument for $15GB iPod vs. 4GB iPod Mini. I think the argument is better if you just say $199 for Rio player (blah!) vs. $249 for iPod mini with award winning design,interface and ease of use.

  5. I think it’s inaccurate to assert that good design always wins, otherwise the world would be full of Mac users, and Microsoft would be a footnote, maybe still selling programming languages and educational software. (Remember that?)

    It would be more accurate to say design matters in this market. Cool counts here, because cool counts to people who like music. Probably, what happened is Apple was first to market with a truly portable device that could hold most people’s entire MP3 collection. And since it’s Apple, it was elegant and well designed. It was storage capacity and size that brought them in. Remember, the HD-based leader at the time was the Nomad JukeBox, which was ugly, and had a terrible interface. Apple defined the market, and added elegance and coolness into the mix. And here we are. That doesn’t mean it will always work this way.

    At any rate, I love my iPod. It is my constant companion. The fact that it is cool looking is icing on the whole-music-collection cake.

  6. People can whine disappointments and wonder “why not?” all they like but by now (and for now) it seems obvious Apple simply is *not interested* in producing products catering to an overcrowded “bottom dweller/feeder” market and the iPod mini is yet another example of that.

  7. ummmmm $499 ipods sell great so yeah, $249 is mass market too ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    did he try one? i’d have paid $299 for the mini now that i’ve tried it.

  8. meat of moose – I’m right with ya – same principle as the downloadable music beef I’ve had for months with the “others” – show us the hard numbers – which, since they’ve been so quiet, can only be interpreted as “dismal” and no where near the rate that iTMS has been doing. Can’t wait to hear how quickly Apple touts selling its 1 millionth iPod mini. Where will the Rio be? Tanning on a beach somewhere?

  9. Don’t get too worked up about this article. The guy’s just taking potshots because he’s worried, they all are. Apple’s enormous success with the iPod in terms of to-die-for brand recognition, engineering and interface has them circling the wagons in terror. Cupertino is eating their lunch with the iPod, and now an arguably cooler, and better-engineered gadget than the original ‘Pod is carving away at the flash-based segment of the market. The truth is that the mini is an excellent value compared to flash-based players, so they have to spread some FUD (read bullshit) to slow the erosion. It’s the same story as with Buymusic.com (remember them?) and Napster vs iTMS.

    “did he try one? i’d have paid $299 for the mini now that i’ve tried it.”

    Mac Beth,

    Don’t start with the geeks in this thread. Make sure you keep the observations strictly about music! Thanks for the laughs the other day, my sides still hurt!

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