AmTech’s Wu warns: iPod touch price cuts ‘nice,’ but ‘may not be enough’

“Across the board price cuts announced by Apple on its iPod touch line of digital media players are ‘nice,’ but may not be sharp enough to drive a sales surge given economic conditions and the more aggressively priced iPhone 3G, according to one Wall Street analyst,” AppleInsider reports.

“American Technology Research analyst Shaw Wu, who had previously recommended that investors reset their expectations for Tuesday’s ‘Let’s Rock’ event, believes favorable commodity pricing on components such as NAND flash will allow Apple to absorb the new cuts without a material hit to its margins,” AppleInsider reports.

“‘As expected, the new second generation iPod touch has a slimmer form factor with lower price points of $229, $299, and $399, respectively for its 8 GB, 16 GB, and 32 GB models,’ Wu told clients,” AppleInsider reports. “‘While we are pleased to see lower pricing, we are concerned that price points may remain too high given the tough macroeconomic environment and relative to the 3G iPhone at $199 and $299.'”

Full article, in which UBS Investment Research analyst Maynard Um offers a completely different take than Wu (“we believe it will stimulate demand and benefit profits”), here.

Um is right. Wu is wrong.

44 Comments

  1. It’s a big world with many cultures and languages. However, the Um family got to Ellis Island and Maynard’s great-great-great-grandfather hesitated too long when they asked him for the family name. That story is a laugh riot at family reunions but they are probably easily amused.

  2. Seems really interesting these analyst guys feel the iPhone compares favorably on price.

    Clearly these guys have company cell phones. My gut tells me when they sit down at the laptop, they completely lose any connection with how parents and young people spend money.

    I’m not saying they didn’t do the math, but when I think about a little game player for my young kids that will play their songs and a Hannah Montana video on the airplane that costs $229, I have no problem seeing that as a viable alternative to the iPhone with its requisite $80+ a month service fee to AT&T;.

  3. It’s kind of annoying how people keep comparing the iPhone and iPod Touch economically. They may be similar technologically, but they have two completely different markets. One is an iPod and the other is a phone.

    Even though you can get an 8 GB iPhone for $199, if you’re not looking for a phone, then the $229 iPod Touch is looking pretty good. I’d say that the price point is pretty impressive for the Touch considering Apple isn’t getting a subsidy from AT&T;for it like they are with the 8 GB iPhone.

  4. The price is carefully considered. I was expecting $249 for the 8GB model.

    If it was $199 or lower, more people would consider getting a touch and carrying a separate mobile phone. Since it is higher, people who look at only the initial price points (and not long term cost of ownership) will get an iPhone. People who do consider the long-term cost of an iPhone will consider $229 to be a bargain price for an iPod touch.

    You can actually get a refurb first gen iPod touch (8GB) at the Apple Store online for $179.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.