Cheap iPod

Introduction

The iPod is a portable media player developed by Apple Computers. The first model was launched in 2001, now known as the 'Classic'. In total five different iPod's have been released, Classic, Mini, Shuffle, Nano, and Touch. The mini was discontinued as Apple decided to concentrate on flash memory mp3 players, rather than those using a hard-disk. Each iPod model has been updated, some just once or twice, others over five times. Each model update is called a 'generation'. For example, the 'Classic' model has been updated at least six times, therefore there is a 1G, 2G, 3G, 4G, 5G and 6G version of this iPod.

The price of the iPod is largely dependent upon the price of global hardware components such as flash memory. Apple has recently been buying a large proportion of the global flash memory production. The price of many of it's flash based players, like the Shuffle has come down in recent years. Whereas the Classic, which uses a harddisk has not seen such a large depreciation. However, due to the rising economic problems in 2008, component and raw material price are rising, therefore so may the iPod price.

The global economic slowdown also appears to have effected the global sales of iPod's, which look to have reached saturation point. Over one million units were sold in 2007, but this is unlikely to be matched in 2008.

Launch Price

1G - $499

News

iPod Sales Growth Slowing

It appears the sales of iPods has hit near saturation point, with those who want an iPod already owning one. Apple's founder Steve Jobs used to make a song and dance about the amazing sales growth of the iPods. He's now tended to focus on the market share Apple has, due to overall sales per quarter tending to level off. For example, first quarter sales of iPods was as follows, 2006 - 14043, 2007 - 21066, 2008 - 22121. As you can see, there was an increase of 7000 sales between 2006-2007, but only 1000 between 2007-2008.

In a vain hope of improving sales for existing iPod owners, Apple have announced minor alterations to iPod models, such as new colours. Unsurprisingly this has coincided with the Christmas holiday period. Therefore, in future, expect more minor updates to iPods so that people will consider replacing their old player.

The changes to both the Touch and Nano, announced in Sept 08 has failed to wet the appetites of analysts. Market predictions are for insignificant holiday sales growth. Analysts do predict a 9% increase, better than last years 5% increase, but down on the 50% increase of two years ago. The fact Apple's shares dropped 4% on the day of announcement, shows investors do not expect a big leap of sales.

iPod sales stall, iTunes sales surge

Whilst sales of iPod's may be stumbling in 2008 (7-9% growth), iTunes sales were surging, up 34%. What does this mean?, well, it means iTunes is creating around about half the income of iPod sales. But with sales predicted to continue growing, Apple have good cause not to worry about stunted iPod sales growth.

Some analysts also believe Apple may continue to announce price cuts, to keep iPod sales buoyed and increase iTunes sales bumper. One note of concern is the licensees of the music. They are want a bigger share of the iTunes pie. Apple think they are being greedy, what they want would make iTunes virtually unprofitable, and even forced Apple to concede they may close iTunes down if the licensees continued with their demands.

iPod Accessories Market Booms

For every ninety pounds spent on an iPod, three pounds on are spent on accessories. The global market is in the billions, and it's no surprise that a majority of the products are produced in China.

To begin with the market was dominated by small players, but as the sales volume increased for this sector, larger companies began to take an interest. Such as Bose, who released their SoundDock, an acclaimed docking station which retails for $399.

For accessories produced in China prices have reduced in 2006 and 2007. But, with manufacturing costs predicted to rise in the upcoming years many suppliers are signing production quotas at the end of 2008. With sales slowing in the US, expect more to be pushed into EU and Asian market.

 
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