Dell targets Apple iPod; cuts prices of Dell DJ players up to 20 percent

“Dell on Monday cut the price of its Dell Digital Jukebox music players in an attempt to put pressure on industry leader Apple Computer. The company cut the price on its 15-gigabyte Dell DJ to $199 from $249, and on its 20-gigabyte device to $279 from $299,” Rex Crum reports for CBS MarketWatch.

Reuters reports, “Apple has the largest part of the digital music player market, according to market research firm NPD Group, which tracks retail sales. The data does not include Dell because its products are sold only over the Internet. Apple was top ranked with 32 percent of the music players shipped in February. RCA was ranked second with 13 percent of the market. About $35.6 million worth of digital music players were sold in February.”

“One analyst said that Dell’s DJ has done well because of its price and battery life. ‘My understanding is that they’re selling pretty well they’ve taken a nice part of the market,’ said Avi Greengart, senior analyst with Jupiter Research. ‘This is not a fire sale,'” Reuters reports.

MacDailyNews Take: Desperation setting in already or a price war Apple must fight? Price seems to be Dell’s only weapon. Competing against Apple’s iPod/iTunes on innovation, quality and mindshare is out of Dell’s league.

46 Comments

  1. $35.6 million worth of players sold in Feb.

    Apple has 32% of the market or $11,392,000 worth of iPods sold in Feb.

    $11,392,000 divided by an average iPod price of $399 = 28,551 iPods sold in Feb.

    $11,392,000 divided by an average iPod price of $300 (closer to reality, but just a guess – as more lower-end iPods and minis would skew the average price) = 37,973 units.

    Round to 38,500 per month (longer months than Feb., more minis being sold) and Jan.-Mar. quarter total of iPod units sold = 115,500.

    So, something seriously off here – seeing as Apple had 100,000 iPod mini preorders alone.

    Does anyone dispute my math? Or is anyone able to explain the discrepancy?

  2. The reason the Dell DJ sells well is because customers buy one because the iPod mini’s all sold out before the customer got to the store and the Dell DJs were the only players left on the shelves.

    If Apple could get more mini hard drives from Hitachi for more iPod minis there would be less customers needing to buy Dell DJs, so roll on July when Hitachi has geared up for full production and World wide release of the mini!

  3. There are no Dell DJs on the shelves – the article says, “The data does not include Dell because its products are sold only over the Internet.

  4. Mathguy: The market folks weren’t counting Dell’s numbers due to internet sales – they may not be counting internet sales of the iPods? Just a guess?

    ‘My understanding is that they’re selling pretty well they’ve taken a nice part of the market,’ said Avi Greengart, senior analyst with Jupiter Research

    I think the market for MP3 players has greatly expanded due in large part to the iPod/iPod Mini and iTunes. I think any sales of the Dell DJ simply increased the market rather than taking anything away from the iPod. Auto Analogy: The Pontiac Aztec increased the market for SUVs in a very small way but didn’t take any sales away from attractive SUVs like the BMW X5.

    Yes Dell – your player is the Pontiac Aztec of the MP3 market!

  5. I also guess that no international sales are included in these figures. I have yet to see a Dell DJ in London. I honestly don’t know if they are available. iPods are everywhere though.

  6. “One analyst said that Dell’s DJ has done well because of its price and battery life. ‘My understanding is that they’re selling pretty well they’ve taken a nice part of the market,’ said Avi Greengart, senior analyst with Jupiter Research. ‘This is not a fire sale,'”

    Don’t you love how the analysts virtually apologize here for Dell, meanwhile if Apple cut prices it would surely be described as an act of desperation and there would be a death knell soon afterward. What a bunch of tools…

  7. Analyst Jimbo von Winskinheimer of the Pluto Research Group says that Dell has priced its Dell DJ out of the mainstream competition. He goes on to say, “Bwahahahahahaha”

  8. Mathguy: The way you figured your numbers is incorrect. Apple has about 56% of ALL MP3 player revenue. You can’t just take 1/3 of all revenue, and give it to Apple.

  9. What’s funny is that the prices that Dell has cut from were already reduced prices (by $50). So, it looks like Dell is throwing the gauntlet at Apple to enter into a price war. All I know is this, if Apple were to reduce its prices by $50, Dell might as well put up the white flag.

  10. In the last analysis I read, Dell didn’t figure in any unit with more that 10% of the marketplace.

    It was something like iPod at 39%, RCA Lyra at 13%, iRiver and one other around 10%, so Dell’s DJ is under there somewhere.

    I think this is a fire sale! Don’t forget these are rebadged Creative units, so they must have bought in bulk – just as HP will do with iPod – and rather than have to explain high levels of stock at a reporting point, they’ve been trying to get them shifted in any way possible (including channel sales) for the last few months.

  11. Unlike other companies (cough, Dell, cough) who would rather not say, why don’t we just wait until April 14 and let Apple tell us how they’re doing? Just a wild ‘n crazy “out there” thought…

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