Apple VP Phil Schiller: iPod shuffle won’t cannibalize iPod mini, iPod sales

“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.

14 Comments

  1. Depends on what hurting meant. Most people who bought a ipod mini, would have gotten the regular ipod if the mini never existed. They just wanted an ipod! I don’t see the same with the shuffle, because there’s no screen, and a big big difference in size.

  2. I offer myself as an example…

    I bought iPod mini because the price was more in line with my budget and the size made it a better choice for me. I am very happy with it even though I have more than 4GB of music on my Mac.

    I am ordering iPod shuffle because the price is very attractive and the size is even more convenient. Neither of these purchases was made at the expense of iPod, Apple just got more of my money than it would have if the options were limited.

    I’m sure plenty of people have a need for 20GB or even 60GB of music with them all the time, but as for me, I don’t mind changing the music out every now and then. It seems to me (especially with auto-fill) that iPod shuffle is perfect for my needs; and, I would think, the needs of others as well.

    ~M

  3. And I will be picking up a Shuffle for my daughter who won’t leave my new 20 gig alone. She has already dropped it once.

    If the Shuffle didn’t exist, I wouldn’t be buying her a Mini, for instance. So in my case the lower price and solid-state construction results in an added sale for Apple.

  4. I have been trying to decide how I wanted to upgrade from my 1st genreation 5gb iPod. I think I will go for broke and get both the iPod Photo and iPod Shuffle. The shuffle can be for my every day listening pleasure to and from work, and my iPod Photo can store my entire collection for those trips around the world when I need several hours of music as well as a way to store the thousands of pictures I’ll take.

    The point here is that I think Phil is right. I think you will find a lot of people buying the Shuffle as a supplement to the “main” iPod.

    This should be fun to watch!

  5. The 20GB iPod is generally considered the best seller.

    Although it is possible that the five minis added together may equal or exceed the 20GB sales based on the $264 average (wholesale) revenue per unit sale, and based on Amazon best-seller lists.

  6. US$249 was deemed by critics as not low enough, but Apple laughed all the way to the bank,

    Usually this is just a figure of speech. This time, I believe it is literally true.

  7. I picked up a Shuffle to augment my 20 gig. I don’t like the sound on the shuffle so I’ll give it away to somebody in the family– but check it out. I read an article about the sound on both too. I couldn’t care less about the numbers they use etc. My 20g just sounds better to me. I detected a muddled mushy sound on the shuffle at about 7/8 volume.
    However, the lower price is great for kids who don’t care.

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