I’ve been thinking about the announcement of the iPod mini for about 24 hours now, and I think I’ve finally come up with a good perspective from which to view it. Prior to the announcement, a lot of people expected Apple Computer to announce a new iPod based on a small, cheap hard drive like the one recently announced by Cornice. The thinking was that this would allow them to price the new iPod below $200.
It dawned on me that Apple probably looks at the market for hard drive-based MP3 players below $200 as being very price and capacity sensitive. To that end, they may have concluded that building an iPod-like device to sell below $200 would be akin to selling cars like the Honda Civic. These are very good cars, but they are primarily known for their reliability and fuel efficiency, not for their distinctive style.
I think Apple decided that it wanted to build a small music player that appealed to the kind of person who would drive a Mini Cooper instead. This means building something small with a real emphasis on style. Also, how can you not see the similarity between the positioning of the two products once you realize how similarly they’re named?
The Mini Cooper – iPod mini analogy also helps explain pricing. Mini Cooper S models go for $22,000 – $23,000. No one will confuse its price with that of a Hummer, but, that’s a premium price for a car that’s so small. Edmunds.com said of the car, “Although the Cooper is no great performance car and has minimal space for passengers and cargo, it has all of the things that made it so popular in the first place: an accessible price, miniature dimensions for urban convenience, and fun….”
Looking at the iPod mini’s capacity, 4 gigabytes or 1,000 songs, it’s a fairly low capacity device compared to the smallest iPod; The low-end iPod now has 15-gigabyte capacity and only costs $50 more. But, since I bought my wife her 10 Gigabyte iPod two weeks ago, I have realized that some true music aficionados don’t have 2,500 songs in their collection. For many people, 1,000 songs in a device the size of a credit card is a hell of a lot.
I think that the iPod mini is enough player for a lot of people, and it has enough style to get another group of consumers to open their wallets at the $249 price point.
More importantly, I am looking at the iPod mini as another effort by Apple to defy the general tendency toward commodtization of a part of the consumer electronics market that they basically created. Given the success of the first three generations of the iPod in the face of me-too offerings from Dell and an armada of consumer electronics companies, I am not willing to bet against Apple’s market savvy.