Also-ran MP3 player makers miffed by Apple’s impossibly low price for iPod nano

“Korean MP3 player makers are miffed by the release of a new product by world market leader Apple that they say is cutting corners by using Samsung Electronics flash memory chips,” The Chosun Ilbo reports. “Apple Computer unveiled its ultra-lightweight iPod nano flash memory player on Thursday (local time). The U.S. company holds 50 percent of the global market share with its iPod series.”

“The iPod nano can store up to 1,000 songs or 4 GB, the biggest storage capacity yet for a flash memory player. The new MP3 players cost US$249 for the 4 GB version and $199 for 2 GB, about half the price of existing products,” The Chosun Ilbo reports. “‘Memory chips affect more than 50 percent of MP3 players’ prices. Apple presumably bought the flash memory chips at a 50 percent discount from Samsung.’ But Samsung Electronics executive Joo Woo-sik defends the company. ‘I can’t tell you the discount rate, but it stands to reason that we expand the range of discount rates for a big buyer like Apple,’ he said. ‘Samsung didn’t mean to do any harm to domestic MP3 manufacturers.'”

The Chosun Ilbo reports, “Reigncom [iriver] spokesman Kim Dong-hwan said, ‘We can hardly declare a price war with Apple. We’ll counter Apple’s challenge by releasing new concept products.'”

Full article here.

Advertisement: Apple iPod nano. 1,000 songs. Impossibly small. From $199. Free shipping.
Why not try competing with Apple iPod based upon variety of third-party accessories? They’ll have about as much chance of success with that idea as with any other. The more you buy, the less you pay; that’s why iriver and the rest of the also-rans can’t do what Apple has done with pricing: not nearly enough people want their products.

Related articles:
Mossberg: Apple iPod nano ‘beautiful, incredibly thin, and exceeds Apple’s performance specs’ – September 08, 2005
Over 1,000 accessories now available for Apple iPod – September 07, 2005
Apple’s iPod nano will make competitors whimper, Motorola’s ROKR inexplicably bland – September 07, 2005
Tech pundit Enderle: ‘iPod Nano is a hit,’ Motorola ROKR ‘simply doesn’t have enough Apple in it’ – September 07, 2005
Jupiter analyst Gartenberg: ‘the market is going to go for Apple iPod nano in a big way’ – September 07, 2005
Analyst: iPod nano ‘could be Apple’s next home run’ – September 07, 2005
Video of Steve Jobs introducing iPod nano, ROKR iTunes phone now available online – September 07, 2005
Apple’s Steve Jobs predicts ultra-thin iPod nano ‘will become the highest volume iPod in the world’ – September 07, 2005
Apple introduces iPod nano – September 07, 2005
Apple’s iPod nano will make competitors whimper, Motorola’s ROKR inexplicably bland – September 07, 2005
Apple stomps competitors in flash-based MP3 player market – September 02, 2005
Analyst expects 3-6 million 4GB flash-based Apple iPod mini units to ship in second half 2005 – August 25, 2005
Apple to switch 4GB iPod mini from hard-drive to flash-based? – August 22, 2005
Apple’s iPod shuffle takes nearly 60 percent of US flash-player market in March – May 04, 2005

21 Comments

  1. It’s nice to see the economy of scale on our side for once. Apple is the 800 pound gorilla in this market and as long as they keep innovating (which it seems the company is genetically coded to do) it will be increasingly difficult for someone to knock them off the top of the hill.

    You go, Apple, You go!

    MW = “distance” as in all they can see now is Apple’s taillights receding in the distance in a swirl of dust.

  2. Got my nano last night at the Apple store. I love it. Wow, is it small. One pleasant surprise: at first I thought it was odd that the headphone jack is on the bottom instead of the top, but having it there makes it a little easier to hold. You can wrap your pinkie finger around the plug and it acts like a handle. That frees up your thumb a little better to activate the click wheel. Otherwise, you’d have to hold the unit more in the palm of your hand and your thumb would be in the wrong place. I don’t know if Apple intended it that way but it does help with the ergonomics.

  3. “oh, no! we can’t make a crappy iPod knock-off cheap enough to undercut iPod Nano sales! this forces us to try to come up with our own ideas! curse you Apple!” *shakes fist in Cupertino’s direction*

    MDN: “weeks,” as in “competitors will be scrambling for weeks before announcing anything comparable”

    Moe: great link!

  4. It’s interesting that there seems to be a smaller and smaller set of competitors in the MP3 market–many can’t survive or compete at the pace Apple is setting. If WMA and subscription based music sellers want to have a place at the table, they need to be very worried about the hardware game at this point.

    MW “member”

  5. OMG i just got back from a camping trip with no electricity (no tv, radio, computers) and i come back to see the new IPOD NANO…………

    OMG APPLE I NEVER THOUGHT I COULD LOVE YOU MORE!!!!!! THIS IS THE COOLEST THING I HAVE SEEN SINCE THE IPOD MINI CAME OUT 2 YEARS AGO.

    Apple you are the bestest of the best. I love Apple so much I think I’m going to get an Apple Logo tattoo this weekend! My Dad is a Macgeek like me and even he is getting a tattoo with me!!!

    (i’m getting the chrome apple, he is getting the aqua apple, YES we are both sick)

    I’m buying me a brand new black 4 gig nano!!! WOO HOOOOOO

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