“Shares in Samsung Electronics and other Asian makers of memory chips dipped Wednesday after Apple Computer cut the price of its digital audio players. The price cut apparently fanned fears of steeper price declines in chips used in the products,” Reuters reports. “Apple, which uses NAND flash memory chips in its digital audio players, cut the price of its cheapest model, the iPod Shuffle, on Tuesday and launched a smaller-capacity version of its mid-priced iPod Nano.”
“It also cast shadow over smaller makers of MP3 music players, struggling in a fiercely competitive market dominated by Apple,” Reuters reports. “Analysts and company officials say Apple’s smaller rivals such as Singapore’s Creative Technology and South Korea’s Reigncom will have to follow suit to stay competitive. ‘Apple’s price cut will deepen competition in the U.S. market and other makers will have to lower prices to survive,’ said Donald Kim, a spokesman at Reigncom, the maker of iRiver MP3 players. Creative, which makes Nomad and Zen MP3 players, and Samsung Electronics, which sells Yepp players, declined to comment. ‘We believe Creative would have no choice but to follow Apple’s example and cut prices on their MP3 players,’ said CIMB-GK Securities analyst Jonathan Ng.”
Full article here.
[Thanks to MacDailyNews reader “NeverFade” for sending the link.]
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Related article:
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Apple shares rise on $149 iPod nano, $69 iPod shuffle, Showtime content news – February 07, 2006
Apple unveils new 1GB iPod nano for $149; iPod shuffle now starting at just $69 – February 07, 2006
This is the funniest line:
“Creative, which makes Nomad and Zen MP3 players, and Samsung Electronics, which sells Yepp players, declined to comment.”
They’re speechless!
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Ahhh – Competition is a beautiful thing.
The also-rans have a TOTAL reliance on price as their product differentiation.
While most people point to iTunes as the iPod razor/blades sales giant, I contend that the now $1 Billion iPod accessory market is a catalist for iPod purchases as well. If one invests in an iPod ad then buys two accessories, cross-grading to an also-ran means ditching that $250 Bose iPod speaker system or what have you. And it means having fewer accessories to choose from. Even buying something as simple as a case for an also-ran yeilds far fewer choices in color, style, material, and price range.
The accessory market is crucial for long term iPod dominance and it is just growing and growing.
(1) The iPod is very price competetive, though it comes at a premium, (2) iTunes is the best, not a compromise, music store, (3) accessories are plentiful for iPod, lacking for also-rans.
The also-rans have (1) marginally lower prices, (2) subscription model media, (3) marginally useful features (FM tuners, audio recorders, etc).
I think that this is so cool that it is now Apple that is the company driving the low price lead. Is this a great galaxy or what?
As a Linux investor, what I fear are the anti-trust and success averse Nazis. I hope Apple has a great legal team. The envy driven idiots will be filing anti-trust complaints. Having said that, Apple is doing the right thing, stimulating sales and strangling the wanabees in their cribs.
The iPod has every angle covered. Hardware, Software, Store, Accessories, Cool factor and Price.
Must be a bitch working for one of the other companies.
I don’t know how much it costs for a MS PlaysForSure and Windows Media license, but that has to make it difficult for companies like Creative and Samsung to be competitive with Apple, especially since Apple also has the volume discount advantage as well.
Now if only Apple could be the design, ease of use AND price leader in the personal computer market as well…
Hey LinuxGuy –
I too have read the PUBLIC statements about antitrust litigation, etc…but Apple has made some moves that should dissuade your worry:
(1) iTunes Fairplay songs may be played on Windows or Mac computers running iTunes which is free.
(2) Fairplay has been licensed to Motorola for use in two devices which illigitimizes the “iPods only play iTunes” complaint.
(3) iPods play a myriad of formats including MP3 which requires no DRM.
(4) iTunes plays a myriad of formats including MP3 which requires no DRM.
So Apple has tight control, but you don’t have to pay Apple one cent to play your existing music collection on iTunes and you can transfer all that music to an iPod or Moto iTunes cell phone wihtout buying a DRM song.
Alternatively, if you bought an iTune, you can play it on your computer for free or on a non-Apple moto phone.
Bottomw line: iTunes don’t require iPods and iPods don’t require iTunes.
Microsoft will now have to further lower the potential price on their MicroSound XPee GHQ-5005LC56 uTunez Digital Melody Contraption (vacuum tube upgrade available) “PlaysforShit” compatible music player that they are thinking about making but haven’t made up their slow lumbering dreary minds about yet.
PS: Microsoft’s music player? Definitely time to knife THAT baby.
Ref. link: http://news.zdnet.com/2100-9595_22-512634.html?legacy=zdnn
Seeing as Creative made less than a $1 per player sold last quarter, falling prices is gonna hurt!
Shouldn’t Creative be rattling it’s “patent” saber about now?
MDN word: before..what DID we do before MP3 players?
I SIM WONG HOO! I CREATIVE!! YOU NO F#CK WIT ME!!
I KEEL YOU! I KEEL YOU AND YOUR DIRTY AMERICAN IPODS!!!
WHY YOU GOTTA BE SO HARD?! HUH? WHY . . . WHY YOU GOTTA DO DIS?
ALL WE WANT IS OUR PIECE. DAT’S ALL. OUR PIECE!!!
IPOD TAKE TOO MUCH! APPLE TAKE TOO MUCH!! APPLE NO PLAY “FAIR”! APPLE GREEEEEEEEEEEEEDY!!!!!
WHY APPLE DO THIS?!? WHY APPLE WANNA HURT US?!?!
ALL WE WANT IS OUR 4%! DAT’S ALL! JUST DAT MUCH!! WE TRY TO PLAY NICE, BUT APPLE NO LIKE!!!
ALL WE WANT IS YOUR COOPERATION!
DAT’S ALL! JUST SOME COOPERATION . . . JUST A WITTLE! JUST A WITTLE BIT!!
YOU GIVE IT, GODDAMNIT!! YOU GIVE COOPERATION!!! OR YOU SEE! YOU SEE SOON!!
PEARL HARBOR NOTHING!! PEARL HARBOR SMALL TIME!! WE HURT YOU!
WE HURT YOU GOOD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
hey deedubya, not interface patent violation with the shuffle. No screen, no interface except for buttons. Derivative doesn’t own the patent on buttons
“Ahhh – Competition is a beautiful thing.”
until your job is outsourced for cheap wages & no benefits.
lol Sim Wong Hoo
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Me love you long time.