“Apple Computer Inc.’s recent introduction of several new iPods shows the company is looking for better profit margins, not gaining market share, according to researcher Gartner Inc. And the move could boost its rivals,” Dan Nystedt reports for IDG News Service.
“The top sign Apple is going for the green is its lack of aggressive pricing, according to Gartner analysts Joseph Unsworth and Jon Erensen in a Monday report. The second-generation iPod Shuffle, for example, could have been priced closer to US$49 to stimulate demand from users, since the cost of materials going into it amounts to only $30, the analysts said. Instead, the shuffle is priced at $79,” Nystedt reports.
“The company could have also priced the new 8G byte product lower than $249, since its materials only cost $130, Gartner said, the same with its 4G byte, which at $199 is far higher than the $90 worth of materials inside, and the 2G byte version, which is $149 and is made from materials costing only $70,” Nystedt reports. “The two Gartner researchers even lamented Apple’s decision to discontinue the 1G byte nano, which they say could have been a nice mass-market item for around $99.”
Nystedt reports, “Apple continued to lead the U.S. digital music player market in the second quarter with a 75.6 percent share, according to the NPD Group, followed at a very distant second by SanDisk Corp. at 9.7 percent and Creative Technology Ltd. in third with 4.3 percent of the market.”
Full article here.
While everyone would like lower prices for everything, Apple new iPod pricing looks good. Apple’s pricing certainly seems to have thrown competitors like Microsoft and SanDisk+Real for a loop, as they can’t even seem to produce suggested retail prices for their announced-but-not-shipping iPod wannabes. Obviously, Apple doesn’t need to go after market share and, if pricing were the sole determiner of market share, then Apple’s iPod certainly wouldn’t own over 75% in the U.S. today.