iPod has investors jumping on Apple Computer bandwagon

“When Steve Jobs, Apple Computer Inc.’s chief executive officer, unveiled iPod mini in January, critics frowned. They said that iPod mini, a slimmed-down version of Apple’s runaway hit, the iPod digital music player, was too expensive and that cheaper versions from Apple’s competitors would eat its lunch,” David Akin reports for The Globe and Mail.

Akin reports, “The critics couldn’t have been more wrong. Even before it hit the stores on Feb. 20, Apple had received 100,000 orders for the $249 (U.S.) iPod mini. (The item goes on sale in Canada next month, the company says.) The product has also won raves from reviewers, one of whom said using one was close to being a ‘religious experience.’ Sales of iPod have also helped to win new fans among investors.”

Full article here.

Related MacDailyNews Article:
iPod success opens door to Mac OS X on Intel – March 04, 2004

27 Comments

  1. I only question Mr. Akin’s choice of words. One would expect “critics” to, well, criticize the iPod mini. However, many industry ANALYSTS also pontificated that it was too expensive for not enough differentiation.

    Now, it seems to me that analysts should be held to a higher standard than critics.

    The article goes on to discuss the blither of several financial analysts, some positive, some negative. The simple fact is that analysts are no more privy to the future than we are. Financial analysts as a class, when their financial advice is followed, perform worst than the market.

    Why does anyone listen to them?

    Mike

  2. My cirticism then as now is that Apple missed an opportunity to “clean up” with the mini due to its high price. I am sure it will do well, just not as well as it could have done. No doubt we will have to wait till next year perhaps for the price revolution to follow…..

  3. I think a lot of the blame for the negative views on the price can be put on the wild rumors that were rife before the actual introduction of the product. People were saying it would be between 100 and 200 dollars so it was a bit of a let down. Now I begin to see why Apple is so close-mouthed about future products.

  4. Oh hell, here we go again. It’s been estimated that an iPod mini costs more than $200 to make. Yes, Apple can sell a ton of them at $149 or $199, but with a loss for each sale, the last thing you want is to sell a bunch of them because high number of sales at a loss == huge loss.

    Why do you think dot-com companies went *boom* (even I saw that coming and I am not an economist. Gotta love reel.com, though. I bought a bunch of DVDs from them while it lasted)?

  5. Why lower the price to $199 when they’re already cleaning up though??? iPod minis are difficult at best to find in any color right now. Apple won’t consider lowering the price until the demand falls off. To do otherwise would be foolish since they’d be leaving a lot of money on the table. That would be a rather foolish way to run a business…

  6. I agree with Rob.

    Also, Apple cannot keep up with demand. If they lower the price to increase sales, that would only hurt Apple.

    Apple needs to outsource production to another company in China and work on more partnerships like HP.

  7. I was thinking yesterday that Apple should make more branded iPods like the hp blue version. I think versions for automobile manufacturers would be a natural. Like a VW, BMW or Saturn model (to be included with a new car, of course, along with a direct audio line-in jack.)

  8. I must admit, I too now have iPod mini envy. Though I don’t think I could actually justify purchasing one due to the $50 price difference (my current iPod has over 11 GB of music on it). I agree with john on this one. Apple could have really cleaned up in the lower level market if they cut their profit margine to nearly non-existant. The upside to the fact that they didn’t is that if they’re barely keeping up with demand now, they certainly couldn’t have with a lower price-point. Also, the pro to entering the low-end market is that the prices are low in the low-end market. People are much more likely to switch players in that market (i.e., they buy a crappy Rio which sort of works for a year and then Apple releases a product that kicks its butt, so they buy it since they “only” spent $99 on their other player–or whatever). So, Apple still has the possibility of dominating the low-end market. They’re just taking their time, raking in cash, taking over the high-end (longer-lifed) market and waiting for the price for the technology to come down.

  9. My thought was, the iPod Mini is extrememly popular and demand is high and therefore cost per unit will drop in the near future. So if they begin selling the Mini at $199 in say August, then Apple will still make a huge profit. RIght now they would lose money, but in the near future they can lower the price once everyone gets their hands on one and Mini becomes less expensive to manufacture.

  10. I love people saying that it cost apple 199 to make a mini. Where is the proof for this urban legand? If apple is making only 50 bucks on the mini they are doing something wrong. Electronic markups are HUGE.

  11. Hey, cpr86:
    Apple/Steve Jobs have already pointed out that their margin on the Apple mini is in the range of 20%-25%–which translates into a cost of about $200–so this ain’t no urban myth! That doesn’t even include the up front cost of R&D, which needs to be recouped. That is probably true is obvious if you try to but a 4 GB hard drive separately–which is hundreds more. This discussion is starting to sound like Thurrot, et al: some here blame Apple for charging “too much” and making too much money, while cpr86 blames Apple for not making enough money at $249. Jeez, what a load…

  12. Why do people begrudge Apple making a profit? Just because PC manufactures can barely survive on miniscule margins doesn’t mean that Apple has to follow that business plan. I’m happy Apple is successful and I never felt that when I buy an Apple product I was lining the pocket of the world’s richest man. I know for a fact that when Apple does well I will see better and better products from them. That’s what makes Apple great. Finally, when did you fools looking for the cheapest product decide that you don’t get what you pay for? The less something costs the less it’s worth. Duh.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.