“Apple’s recent announcement of a new, inexpensive iPod called iPod shuffle is well-received among price-conscious users. However, there is a potential downside: cannibalisation. If customers could buy a US$99 iPod shuffle, would that not eat into the business of the company’s more expensive iPods and iPod Minis? Apple’s senior vice president of worldwide product marketing Phil Schiller begs to differ,” Ridzwan A. Rahim reports for The New Straits Times.
“‘If you remember a year ago when we launched the iPod Mini, a lot of people said, ‘Well, don’t you think the iPod Mini is going to cannibalise the white iPod?’ And some other people said, ‘Why would anybody buy the iPod Mini because a 20-gigabyte iPod is a much better deal? For US$50 more, you get 16GB more storage.’ And both were true,’ Schiller says. Introduced early last year, the iPod Mini’s price tag of US$249 was deemed by critics as not low enough, but Apple laughed all the way to the bank,” Rahim reports.
“The company shipped 4.5 million iPods during its first fiscal quarter, representing a phenomenal 525 per cent increase in sales over the year-ago quarter. It was also the highest quarterly sales in Apple’s nearly 30-year history. Schiller contends that Apple has grown the digital music player market so big and fast that there’s room for other products in the product line. ‘We offer the broadest choice for consumers, from the 512-megabyte iPod shuffle all the way up to the iPod Photo with 60GB storage,’ he says,” Rahim reports.
Full article here.