Thursday, September 06, 2007

Why for is an iPod not cheaper...?

So Steve Jobs came down from the mountain on Wednesday to announce the latest in Apple's line of i-Devices, an iPod which pretty much is the iPhone, but without a calling plan and a lot less memory.

Those who have seen the interface on the iPhone know its pretty jazzy, and like the Xerox iconographic interface, is probably the watershed for the future of interfaces, especially in the era of the computer that fits into your pocket.

That said, anyone who actually buys the new iPod Touch is a chump.

The thing has a fraction of the memory of the "iPod Classic", and while you can get Wi-Fi on it, it's still pretty darn expensive for something that will be outdated by January. Really, if you already have a calling plan and an iPod and don't need to spend your time at the grocery aisle blogging, there's not a lot of compelling reasons not to wait to see what comes next.

That, and the cost issue we'll get to shortly.

This is not to say there are not compelling reasons to WANT the new iPod... just... wait. Do not give in to the crushing desire to show all your friends how the screen stays level when you turn the iPod around.

What I find particularly irksome is that the lower memory (ie: cheaper iPods) are now disappearing from the line up, or becoming Nanos (ie: the iPod to small for my mitts). Perhaps a Nano is what's in my future.

But, add in the fact that they reduced the cost of the iPhone by $200 (more than the cost of most phones to begin with) within a few months of the initial offering, and... holy cow. Bad form, Apple. Why not just slap a "sucker" sticker on the forehead of your most faithful? I don't know if the iPhone isn't meeting expectations for sales or what, but it doesn't make me want to run out and drop $250 on an 80 GB iPod if its going to be $150 by April.

And that's kind of what's so vexing... When is the right time to get onboard with a new iPod? I don't know.

All I know is that a few years ago they released all those tests you could take to find out if you were an early adopter, cutting edge adopter, or whatever, and I always sort of thought that the folks who buy new technology of any kind when it first hits have either far more enthusiasm or money than me. I like to wait to see if the technology is going to get wide release (remember the mini-cd's we were all supposed to use circa 1996? No? Well, my point... But you could find albums in the format for a while). And, of course, after watching the PS3 just drop its cost, you kind of wonder exactly what the profit margin is on some of these doo-hickeys.

I'm not knocking the iPod. Fer chrissake, I'd love to have a new one. I just sort of question what, exactly, I'm buying from them, and if I shouldn't start looking at my options with other MP3 players. Mostly, I'd be fine with a 60 or 30 GB iPod, so must I carry a Nano?

13 comments:

RHPT said...

Did you read where Jobs offered everyone who bought the iPhone at the higher price point a $100 Apple Store credit?

http://www.apple.com/hotnews/openiphoneletter/

And you know, people chose to buy the iPhone for $600. They themselves spent the money because they considered that they were getting their money's worth.

As for the Touch ... You are wrong, my friend. The capacity is low, but the WiFi/iPhone interface sold it for me.

As for you, why not buy a 80GB? Or, I can sell you my 60GB 5th Gen I get the Touch ;)

RHPT said...

Oh, and you can buy an iPod for $150. They might be refurshibed and/or an older generation ...

Seems like Apple only cuts the price on iPods when they refresh the lineup.

The League said...

I'm a bit stunned. Is there no lesson to be learned from the past few months with Apple? As I mentioned, I, too, covet both iPod and iPhone, so let's not let the quality of the technology get in the way of this discussion.

My point (I guess I was trying to couch it in polite terms as people I care about have bought the iPhone) is that Apple seems well enough aware of the cult of technology they've built and have become emboldened in the face of off-the-mark sales to drop the price of a product by hundreds of dollars and still expect their fans to keep showing up to buy their next product upon its release.

Giving people back $100 is a step in the right direction, but doesn't really convince me that Apple handled this very well. Especially as that's $100 that will go back into iTunes, etc... and mostly just disappear.

I agree that the people who spent the money the first week spent what they thought the iPhone was worth, and that was kind of my point. New technology is something I tend to enter into cautiously, especially from a price point. I don't even want to talk about how much I spent on my first DVD player in 1999 when I was the the second person I knew to own one (but was one of three people to buy one in a week).

I also was a victim of the Packard Bell refurb scandal from the mid-90's, and I've had a hard time picking up refurb'd anythings ince then.

I agree that the interface of the iPhone and iPod Touch is the next generation of UI.

What I would point out is that Apple is now using the trust they've built up as the premier MP3 player/ new tech company and selling their product at a profit so extreme that they can cut the cost by $200 and remain profitable. That's fine, but if the folks who spent the money right out of the gate don't feel that Apple jerked them around a bit, and don't feel they need to learn to be more cautious next time they invest in an Apple product, then I suppose there is no lesson to be learned.

RHPT said...

I don't know why people are surprised that the price was cut. It was bound to happen. And Apple doesn't generally cut prices. I know this is especially true for the iPod. As I mentioned, they seem to only cut the price of the iPod when they refresh the lineup.

As Apple is new to the cellphone business, maybe they uncharacteristically cut the price to spur demand or be more competitive. They do not have such problems with the iPod, as it is so dominant.

So, yes, the Touch will probably get more memory and a lower price point in 6-12 months, but does that mean I should wait until then, or wait 24 months and wait for that price cut and that larger capacity?

I sound like a fanboy, but I'm really not (really). I just think some people overreacted to the price cut. I can't count how many times I purchased some gadget at full price only to see the price drop not a few weeks later. It sucks, but it is what it is.

The League said...

Dude, it was around a 1/3rd price cut. That isn't an expected cut for a new item (when no real competing product is introduced). And those sorts of cuts usually take several months, not just long enough to gauge the early adopters.

I DO think you'd be a sucker if you don't wait for the next generation of iTouch. Clearly you can never beat the curve with Apple's next generation, but can you really not make it without the iPod Touch for six months for them to work out bugs? Find out if its worth the money? See what the price is in 6 months?

You can always wind up seeing prices drop, but with Apple now working like clockwork with new releases, why jump on the first release? Why not wait until you hear feedback 4 months from now?

RHPT said...

Why must you always crush my dreams?

mcsteans said...

My mother has never been an early adopter, but decided to buy an iPhone out of necessity (she doesn't yet want to pay for internet access at their new home in San Marcos where they will not permanently move for another 2 years). She also to my knowledge has no interest in store credit and has never used iTunes.

I realize she is in the minority with her situation, but that still doesn't mean she's not upset.

The League said...

It's not about crushing dreams, RHPT. It's about looking at less than stellar business practices and how Apple can get away with them.

Honestly, for me, I don't care too much. I just want an iPod with 60 GB of memory for less than $200. Obviously that's possible, but Apple doesn't see it worth their while to sell them at that price point.

RHPT said...

here's an interesting article ... You can skip the first three paragraphs and the stuff right after it.

iPhone

As for Jaime's mom .. I understand why she would be upset. She can probably sell the credit on CL - depending on how Apple works it out - and get close to $100 for it.

The League said...

I'm with the author to a point, but the argument that early adopters have a bucket of cash, so... whatever, they'll be fine... may have some factual basis. However, that's remarkably shortsighted. The issue is will Apple be able to get their clientele to readily buy first releases of new products if there's an established an reasonable expectation that the price is going to drop significantly within three or four months and continue maximizing profits without going for Dell-like volume and all that that implies?

I agree that Apple has the right and duty to their share holders to maximize profit. If I were an Apple shareholder, I would be frustrated that the iPhone hasn't been going that crazy gangbusters thanks to the single-provider decision (whoever signed that contract should be fired), and be screaming bloody murder that Jobs' brilliant method for increasing sales was to make the core audience of early adopters wary of future releases.

I work in multimedia. I appreciate tech geekery as much as the next guy, but Jobs has done nothing but reinforce my conservativism when it comes to faddish adoption of new technologies. The hip-factor of having the latest Apple product will now have a blemish, especially the iPhone, for the foreseeable future, as other consumers pause and shake their heads at iPhone users and think to themselves "poor jerk got screwed out of $200... "

I don't think folks mind getting screwed, as long as everyone is getting equally screwed.

RHPT said...

Here's a couple more interesting articles.

NYT.com article

This one you won't like at all.

New iPhone models coming soon?

The League said...

I do want to point out a comment you made earlier, which was supposed to defend the move by Apple, but kinda actually makes my point.

"I don't know why people are surprised that the price was cut. It was bound to happen. And Apple doesn't generally cut prices. I know this is especially true for the iPod. As I mentioned, they seem to only cut the price of the iPod when they refresh the lineup. "

I don't think anyone was surprised prices were cut, but 1/3rd is drastic for any product that is supposedly successful. You then state in one sentence that while the price cut was both bound to happen and that Apple doesn't normally cut prices. These statements are both true. As you mention, this only seems to occur when they introduce a new product. They seem to keep a single price for their premier version of an item, especially the iPods, reducing the cost of what is now the "old" item. To this point, this change was occuring about once or twice a year.

No new product or service is being offered in the iPhone line. Thus, Apple followers would not expect either so drastic a cut, or one so soon upon the release of the iPhone.

From other of your comments and our pitbull-like determination to convince me that throwing away $200 is okay, I have determined that you and I simply have a difference of opinion regarding how quickly it is wise to adopt new technology and what criteria we use for adopting new gadgets.

I have no idea how many iPhones Apple was planning to sell, but I do agree that they will sell many more of them at the lower price point. (The LG Chocolate sucks, btw... I have one and am completely dissatisfied.) I suggest a quick review of the rules of supply and demand. I do suspect that the MBA mentioned in the article would leap to the conclusion that cheaper iPhones would sell better. I would also suggest that the same MBA might agree with the analysts who would see such a drastic price cut as a move of desperation, trying to recover costs and make up for revenue.

keep in mind, this article is all excited with how demand hasn't exceeded supply so far. Might this not suggest Apple hasn't sold quite as many of the phones as they thought they might? The MBA might aslo know that warehouses full of iPods probably don't fit into the mail-order direct business model of the typical online store. When this happens, you need to cut prices to clear inventory in warehouses and all that that implies.

Most of my point, if I may reiterate, was that Apple screwed their core audience of first-on-the-block adopters and true believers. I continue to see nothing short of blinkered cultish support in defense of Apple's indiscreet decision to so drastically drop the price after saturating the early adopter market. This support doesn't really surprise me, given the near religiosity with which Mac users view their toys and Apple as a company.

Logically, however, I'm still completely baffled how anyone would not wait a few months to see what Apple was going to do next at this point. Not one of these articles suggests prices will stabilize or that early adopters did not get screwed with the price drop. They seem much more intent on reinforcing the emotional idea that early adoption = good than noting that maybe a consumer who values their money may wish to wait and see if further price drops occur and at what general frequency.

That is the nature of tech reporting, though, i suppose.

RHPT said...

Honestly, I'm not sure why I'm defending Apple so vigorously. I might be turning into a fanboy.